Over 45,000 funeral arrangements are currently in doubt after a pre-pay provider collapsed into administration, adding more heart-break to mourning families.
Administrators have said that Safe Hands is "unstainable in its current form" after a period of "severe financial challenge". The funeral plan company will be unable to take on any new customers or take any direct debit or standing order payments after hiring FRP Advisory to oversee the insolvency process, the Mirror reports.
A notice on the Safe Hands website said it is "uncertain that the funeral plans will be able to be fulfilled", adding a short-term solution has been offered for a period of 14-days. It adds the financial difficulties are "understood to be linked to the pandemic".
READ MORE: Death notices and funeral announcements from the Liverpool ECHO
It reads: "This is only a temporary measure to afford the joint administrators time to explore options for a potential longer-term solution. All plan holders should, however, consider their funeral plan with the company to have been terminated with immediate effect. This includes funeral plans that were part-paid and funeral plans that were being processed."
Back in 2020, due to the covid pandemic strict restrictions were placed on funerals including a limited number of attendees and no flowers allowed, meaning families could not give their loved ones the send off they wanted. With news the funeral plan has gone into administration could leave thousands of families worried for the future,
Nedim Ailyan, partner at FRP and joint administrator of Safe Hands, said it has agreed a deal for listed funeral firm Dignity to provide existing customers with funeral planning services for a period of 14 days. Safe Hands said it had been in discussion with the Financial Conduct Authority (FCA) before calling in administrators and withdrew its FCA application in February 2022.
New rules from the FCA to regulate the funeral plans market will come into force from July 2022. The measures will force firms to ensure that plans are sold fairly, perform as expected and provide value for money.
Mr Ailyan said: "As joint administrators, we have been appointed by the court and will undertake a detailed statutory investigation of the financial position of the business and the events leading to the insolvency. This will support our work as we progress towards realising the company's assets to make returns to creditors.
"Regrettably, the administration means the company is not in a position to issue refunds at this time. We appreciate how upsetting this period of uncertainty will be for Safe Hands Plans' customers and their families."
Administrators said they will contact all plan holders and their personal representatives to outline for process for registering claims. Customers will need to contact the administrators for a refund, but it is unclear how much money could be reclaimed at this stage.
