In a report seen by the outlet, Safe Hands’ administrator, FRP Advisory, warned approximately 46,000 holders of pre-paid plans sold by Safe Hands that they should expect to only get between 10% and 20% of their capital returned.
The company reportedly promised clients that their funeral costs would be covered by purchasing one of its plans, with money held in a trust to be used after the plan holder’s death. It estimated that £10.6m-£16.1m can be returned to clients, net of costs, compared to £71.1m worth of claims.
However, Safe Hands fell into administration in March 2022, after a period of “severe financial challenges”, which left the business “unsustainable” to continue trading in its current form.
According to the report, the firm initially applied to become a regulated pre-paid funeral plan provider in late 2021, but withdrew its application “after it became clear that the FCA was unlikely to accept it”.
In the report, accountants from FRP said: “A significant number of the investments within the trust are illiquid and/or severely impaired, with a large proportion of these funds being held in offshore funds.”
In a statement last March, Nedim Ailyan from FRP Advisory said: “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.
“We will contact all plan holders, and personal representatives of any deceased plan holders, to outline the process for registering a claim as part of the administration.”