Some 46,000 customers of the failed funeral plan firm Safe Hands have been warned that they will only get back a fraction of the money they handed over to the company to cover the cost of their funeral in the future.
In the latest progress report issued late on Friday by administrators FRP, customers were told that the trust fund set up to pay for their funerals was in serious deficit.
FRP said that it only expected to recover trust assets with a value of between £6.45million and £10.5million.
Protection: All funeral plan providers are now regulated by the Financial Conduct Authority with customers’ money protected by the Financial Services Compensation Scheme
This compares with the £70.57million cost of providing all the funerals promised – equivalent to a return to customers of between 9p and 15p in the pound.
In the note, the administrators explain that the shortfall in the trust fund’s finances is primarily a result of a big chunk of its assets being invested offshore by TJM, an investment company wound up earlier this year.
Most of the £46million invested offshore is in illiquid equity investments and FRP suggests it has little chance of realising any value from them.
All funeral plan providers are now regulated by the Financial Conduct Authority with customers’ money protected by the Financial Services Compensation Scheme in the event of company failure.
But Safe Hands, based in Wakefield, West Yorkshire, collapsed before the regulations came into force.
The Mail on Sunday has led the way in revealing wrongdoing at Safe Hands.
