West Lancashire MP Rosie Cooper has raised concerns that the upcoming Financial Conduct Authority (FCA) regulation of prepaid funeral plans may lead to existing plan holders experiencing significant financial losses.
The FCA recently published their draft rule book detailing their proposals for the regulatory environment that will take effect on the 29th July 2022. The proposal notes that a number of firms that offer funeral plans will not be able to meet the requirements. These firms will be forced to exit the market and the existing plan holders of these companies will either move to another provider or receive a refund.
Members of the funeral industry contacted Rosie, who is the Vice Chair of the Funeral and Bereavement APPG, to say that they are concerned the FCA has failed to adequately plan for what happens when a financially struggling company exits the market without finding another company to take on the funeral plans they hold.
West Lancashire MP Rosie Cooper said:
“This could be a disaster for people that have heavily invested financially in a funeral plan. They are often elderly and vulnerable and because of this regulation they may be suddenly facing additional bills and administration for funerals that they understood to be fully paid for.
“The time, effort, and money that these people have poured into their funeral plans is not expendable! In the case of their plan provider leaving the market we must ensure that they are provided with either an adequate replacement or a full refund. They deserve this peace of mind!
“I have written to the Chancellor of the Exchequer asking him to explain how they are planning to protect the people whose funeral plans are at risk.
“We must not allow this regulation to result in the loss of potentially thousands of pounds for families who then may not even be able to afford the funeral they had originally purchased!”