In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA) from 29 July 2022. When FCA regulation takes effect, funeral plan providers will need to be authorised by the FCA in order to enter into or carry out funeral plan contracts.

Safe Hands Plans has recently gone into administration. The government understands that this development will be concerning for customers of Safe Hands and continues to monitor the implementation of regulation in this sector closely.

Dignity’s recent commitment to provide ongoing support to Safe Hands’ customers for the next six months is welcome. This will ensure that any planholders who pass away during this time will receive a funeral without any additional charge.

It is unfortunate but unavoidable that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation. However, a well-regulated market should promote effective competition and drive better outcomes for consumers in the long-term.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse.

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA). This means that by 29 July 2022 all funeral plan providers must be authorised by the FCA.

Safe Hands Plans has recently gone into administration. I am aware that the current situation will be distressing for customers of Safe Hands and can assure you that the Treasury continues to monitor the implementation of regulation in this sector closely.

While the FCA does not yet regulate funeral plan providers, it is currently supporting the industry and administrators to see if a longer-term solution is possible for Safe Hands’ customers.

It is regrettable that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation. However, a well-regulated market should promote effective competition and drive better outcomes for consumers in the long-term.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse and impacting more consumers.

The Government’s legislation has allowed for an 18-month transition period before the new regulatory regime comes fully into force on 29 July 2022. This transition period was intended to give existing providers sufficient time to prepare for the new regulatory requirements. The FCA’s guidance is clear that providers who are not seeking or not able to obtain authorisation should either transfer their existing plans to a provider which is seeking authorisation, or wind down in an orderly way before regulation starts.

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA). This means that by 29 July 2022 all funeral plan providers must be authorised by the FCA.

Safe Hands Plans has recently gone into administration. I am aware that the current situation will be distressing for customers of Safe Hands and can assure you that the Treasury continues to monitor the implementation of regulation in this sector closely.

While the FCA does not yet regulate funeral plan providers, it is currently supporting the industry and administrators to see if a longer-term solution is possible for Safe Hands’ customers.

It is regrettable that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation. However, a well-regulated market should promote effective competition and drive better outcomes for consumers in the long-term.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse and impacting more consumers.

The Government’s legislation has allowed for an 18-month transition period before the new regulatory regime comes fully into force on 29 July 2022. This transition period was intended to give existing providers sufficient time to prepare for the new regulatory requirements. The FCA’s guidance is clear that providers who are not seeking or not able to obtain authorisation should either transfer their existing plans to a provider which is seeking authorisation, or wind down in an orderly way before regulation starts.

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA). This means that by 29 July 2022 all funeral plan providers must be authorised by the FCA.

Safe Hands Plans has recently gone into administration. I am aware that the current situation will be distressing for customers of Safe Hands and can assure you that the Treasury continues to monitor the implementation of regulation in this sector closely.

While the FCA does not yet regulate funeral plan providers, it is currently supporting the industry and administrators to see if a longer-term solution is possible for Safe Hands’ customers.

It is regrettable that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation. However, a well-regulated market should promote effective competition and drive better outcomes for consumers in the long-term.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse and impacting more consumers.

The Government’s legislation has allowed for an 18-month transition period before the new regulatory regime comes fully into force on 29 July 2022. This transition period was intended to give existing providers sufficient time to prepare for the new regulatory requirements. The FCA’s guidance is clear that providers who are not seeking or not able to obtain authorisation should either transfer their existing plans to a provider which is seeking authorisation, or wind down in an orderly way before regulation starts.

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA). This means that by 29 July 2022 all funeral plan providers must be authorised by the FCA.

Safe Hands Plans has recently gone into administration. I am aware that the current situation will be distressing for customers of Safe Hands and can assure you that the Treasury continues to monitor the implementation of regulation in this sector closely.

While the FCA does not yet regulate funeral plan providers, it is currently supporting the industry and administrators to see if a longer-term solution is possible for Safe Hands’ customers.

It is regrettable that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation. However, a well-regulated market should promote effective competition and drive better outcomes for consumers in the long-term.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse and impacting more consumers.

The Government’s legislation has allowed for an 18-month transition period before the new regulatory regime comes fully into force on 29 July 2022. This transition period was intended to give existing providers sufficient time to prepare for the new regulatory requirements. The FCA’s guidance is clear that providers who are not seeking or not able to obtain authorisation should either transfer their existing plans to a provider which is seeking authorisation, or wind down in an orderly way before regulation starts.

Safe Hands Funeral Plans has recently gone into administration. I am aware that the current situation will be distressing for customers of Safe Hands and can assure you that the Treasury continues to monitor the implementation of regulation in this sector closely.

I welcome the commitment from Dignity to provide funerals to Safe Hands’ customers for two weeks.

It is a regrettable fact that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse and impacting more consumers.

The FCA’s guidance is clear that providers who are not seeking or not able to obtain authorisation should either transfer their existing plans to a provider which is seeking authorisation, or wind down in an orderly way before regulation starts.

Safe Hands Funeral Plans has recently gone into administration. I am aware that the current situation will be distressing for customers of Safe Hands and can assure you that the Treasury continues to monitor the implementation of regulation in this sector closely.

I welcome the commitment from Dignity to provide funerals to Safe Hands’ customers for two weeks.

It is a regrettable fact that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse and impacting more consumers.

The FCA’s guidance is clear that providers who are not seeking or not able to obtain authorisation should either transfer their existing plans to a provider which is seeking authorisation, or wind down in an orderly way before regulation starts.

Following consultation with industry the Government concluded that the majority of providers operating in the pre-paid funeral plan market are well run with properly funded trusts.

The Government also found that the reports of poor practices have largely been attributed to providers that had chosen not to register with the sector’s voluntary regulatory body – the Funeral Planning Authority – thereby demonstrating that a voluntary system of regulation cannot be fully effective because providers can simply choose not to comply.

It is a regrettable fact that bringing a previously unregulated sector into regulation creates a possibility that some providers are not able to meet the threshold for authorisation

The Government therefore cannot rule out that in authorising these firms under the new regime, it is revealed that some funeral plan providers are unable to deliver on the promises they have made to their customers.

However, the Government and the FCA are monitoring the situation very closely and, subject to the facts at the time, stand ready to take any appropriate action.

I refer the Hon Member to the answer that I gave on 20 May to the Hon Member for South Holland and The Deepings to PQs UIN: 2183, 2184 and 2185.

Following comprehensive consultation and stakeholder engagement, in January 2021 secondary legislation was made to bring pre-paid funeral plan firms within the remit of the Financial Conduct Authority (FCA). This change will protect consumers by ensuring that, for the first time, all firms that sell and administer pre-paid funeral plans are subject to compulsory and robust regulation.

The new regulatory framework will come fully into force in July 2022, following an 18-month transition period. The FCA’s consultation on rules for the sector closed on 13 April 2021, and the Government will continue to work closely with the FCA to ensure that the implementation of the new regulatory framework goes well.

The legislation allows intermediaries such as funeral directors to become “appointed representatives” of the funeral plan providers whose plans they sell or intermediate. The provider, known as the “principal” firm, would be responsible for ensuring their appointed representatives comply with the relevant rules for selling plans. This results in a proportionate approach, whereby smaller firms that operate as intermediaries will be required to follow the rules that protect consumers, without necessarily needing to undergo full FCA authorisation. To support these small firms during the transition period the FCA will reach out to the industry to explain their regulatory standards and expectations regarding the authorisation gateway.

The FCA is examining feedback concerning competition and smaller plan providers, among other things, as part of its consideration of responses to its consultation. The FCA will consider this feedback in the context of its operational objectives - which include ensuring an appropriate degree of protection for consumers and promoting effective competition in consumers’ interests - as part of its decisions on the regime.

The FCA’s consultation proposed that funeral plans should be brought within the scope of the Financial Services Compensation Scheme. The Government is currently considering whether further legislation is required to ensure the Compensation Scheme would operate effectively for consumers, if it covered this sector.

Following comprehensive consultation and stakeholder engagement, in January 2021 secondary legislation was made to bring pre-paid funeral plan firms within the remit of the Financial Conduct Authority (FCA). This change will protect consumers by ensuring that, for the first time, all firms that sell and administer pre-paid funeral plans are subject to compulsory and robust regulation.

The new regulatory framework will come fully into force in July 2022, following an 18-month transition period. The FCA’s consultation on rules for the sector closed on 13 April 2021, and the Government will continue to work closely with the FCA to ensure that the implementation of the new regulatory framework goes well.

The legislation allows intermediaries such as funeral directors to become “appointed representatives” of the funeral plan providers whose plans they sell or intermediate. The provider, known as the “principal” firm, would be responsible for ensuring their appointed representatives comply with the relevant rules for selling plans. This results in a proportionate approach, whereby smaller firms that operate as intermediaries will be required to follow the rules that protect consumers, without necessarily needing to undergo full FCA authorisation. To support these small firms during the transition period the FCA will reach out to the industry to explain their regulatory standards and expectations regarding the authorisation gateway.

The FCA is examining feedback concerning competition and smaller plan providers, among other things, as part of its consideration of responses to its consultation. The FCA will consider this feedback in the context of its operational objectives - which include ensuring an appropriate degree of protection for consumers and promoting effective competition in consumers’ interests - as part of its decisions on the regime.

The FCA’s consultation proposed that funeral plans should be brought within the scope of the Financial Services Compensation Scheme. The Government is currently considering whether further legislation is required to ensure the Compensation Scheme would operate effectively for consumers, if it covered this sector.

Following comprehensive consultation and stakeholder engagement, in January 2021 secondary legislation was made to bring pre-paid funeral plan firms within the remit of the Financial Conduct Authority (FCA). This change will protect consumers by ensuring that, for the first time, all firms that sell and administer pre-paid funeral plans are subject to compulsory and robust regulation.

The new regulatory framework will come fully into force in July 2022, following an 18-month transition period. The FCA’s consultation on rules for the sector closed on 13 April 2021, and the Government will continue to work closely with the FCA to ensure that the implementation of the new regulatory framework goes well.

The legislation allows intermediaries such as funeral directors to become “appointed representatives” of the funeral plan providers whose plans they sell or intermediate. The provider, known as the “principal” firm, would be responsible for ensuring their appointed representatives comply with the relevant rules for selling plans. This results in a proportionate approach, whereby smaller firms that operate as intermediaries will be required to follow the rules that protect consumers, without necessarily needing to undergo full FCA authorisation. To support these small firms during the transition period the FCA will reach out to the industry to explain their regulatory standards and expectations regarding the authorisation gateway.

The FCA is examining feedback concerning competition and smaller plan providers, among other things, as part of its consideration of responses to its consultation. The FCA will consider this feedback in the context of its operational objectives - which include ensuring an appropriate degree of protection for consumers and promoting effective competition in consumers’ interests - as part of its decisions on the regime.

The FCA’s consultation proposed that funeral plans should be brought within the scope of the Financial Services Compensation Scheme. The Government is currently considering whether further legislation is required to ensure the Compensation Scheme would operate effectively for consumers, if it covered this sector.

The government is committed to strengthening regulation of the pre-paid funeral plan sector. As part of the Budget, and following consultation, the Chancellor announced the government’s intention to legislate to bring pre-paid funeral plan firms within the remit of the Financial Conduct Authority (FCA). This will ensure that, for the first time, all firms offering pre-paid funeral plans are subject to compulsory and robust regulation.

The government intends to lay the necessary legislation very soon. Once this legislation is made, there will be an implementation period before the new regulatory framework comes fully into force. This will allow time for funeral plan providers and firms which sell plans to take the necessary steps to meet the new regulatory requirements.

As part of the Budget, the Chancellor published the government’s response to its consultation on the pre-paid funeral plan sector. This can be found at: https://www.gov.uk/government/consultations/regulation-of-pre-paid-funeral-plans-consultation-on-a-policy-proposal

Treasury Ministers and officials have regular discussions with the Northern Ireland Executive on matters of importance to the economy across the UK, including on funding for justice issues.

Matters of justice are devolved to the Northern Ireland Executive. It is for them to set their own priorities and determine the allocation of funds to deal with justice issues from within their own budgets.

The government launched a call for evidence on the regulation of pre-paid funeral plans in June 2018 which found that the market is not operating as it should. The government found evidence of harm to consumers and found that there is broad support among funeral plan providers for the voluntary system of regulation to be replaced by a compulsory regulatory regime for the sector.

Under the previous government we committed to ensuring that customers of pre-paid funeral plans are properly protected and consulted on a new legislative framework to bring the pre-paid funeral plan market within the remit of the Financial Conduct Authority. The consultation closed on 25 August and a response to the consultation will be published in due course.

HM Treasury launched a call for evidence on the regulation of pre-paid funeral plans in June 2018. The call for evidence confirmed that consumer detriment is present in the pre-paid funeral plan sector and that there is broad demand for the sector to come under compulsory regulation.

Consequently, the government intends to bring the pre-paid funeral plan market within the remit of the Financial Conduct Authority and has consulted on the proposed legislative framework to implement this proposal. The consultation closed on 25 August and the government is currently reviewing the responses. A response to the consultation will be published in due course.

HM Treasury launched a call for evidence on the regulation of pre-paid funeral plans in June 2018. The call for evidence confirmed that consumer detriment is present in the pre-paid funeral plan sector and that there is broad demand for the sector to come under compulsory regulation.

Consequently, the government intends to bring the pre-paid funeral plan market within the remit of the Financial Conduct Authority and has consulted on the proposed legislative framework to implement this proposal. The consultation closed on 25 August and the government is currently reviewing the responses. A response to the consultation will be published in due course.