Are you thinking of taking out a funeral plan? If the answer is yes, you may want to wait until after 29th July 2022, as this is when the FCA’s funeral plan regulations will come into place.
The Best Foundation welcomes such regulation because your money and future plans will be better protected.
What Does the New Regulation Mean?
Funeral plans allow you to arrange your funeral and pay for it (either in full or through instalments) in advance. Many choose this for peace of mind that their funeral wishes will be followed, and so their loved ones will not have the financial and administrative burden on top of grieving.
The Financial Conduct Authority (FCA) will take over the regulation of companies that supply and organise pre-paid funeral plans on 29th July 2022.
This means that the FCA must authorise any firms selling funeral plans after this date. The FCA will ensure that providers meet their rules and give you all the information needed to make an informed decision. They will also make sure your funeral plan covers your needs, is a fair price and that the money you hand over is taken care of responsibly.
A Cautionary Tale
At present, the funeral plan market is not independently regulated. Once the FCA regulations were announced, several funeral plan providers withdrew applications for authorisation.
One such company was Safe Hands, which has now gone into administration. The estimated cost of the funerals promised is £71million, yet the realisable value of the fund is only between £10.6million – £16.1million. Therefore, the administrators recently announced that customers (who on average spent £3000 per plan) are unlikely to receive any more than a fifth of their money back.
This devastating news affects approximately 47,000 Safe Hands customers. This is precisely why regulation of this industry is vital.
Moving Forward
Once regulations are in place, you will be better protected from this kind of situation. Anyone who purchases a funeral plan with a company that goes out of business can apply to the Financial Services Compensation Scheme (FSCS).
Any company selling funeral plans after 29th July without FCA authorisation will be breaking the law. You will be able to check the FCA’s list of approved funeral plan providers for reassurance that the company you’re dealing with is regulated.
(If you already have funeral plans and want to check the status of a firm, you can find information from the FCA here.)
You deserve peace of mind that a safety net is in place when paying for services related to your finances and future. This is exactly why Best offers a client guarantee. For example, if a Best member were unable to complete estate planning work you paid them to do, the Best Foundation would ensure the work was completed by another member free of additional charge.
Find your peace of mind; find your Best member here.
Watch this Space
Although pre-paid funeral plans are becoming regulated soon, unfortunately, the same cannot yet be said for pre-paid probate. This is unacceptable as far as we’re concerned. Therefore, in accordance with our Code of Conduct, Best members are prohibited from selling pre-paid probate plans.
One of the responsibilities of the Best Foundation is to fight significant issues in the estate planning industry on behalf of its members – so watch this space. We will be taking action.
