Dignity boss steps up with FREE funerals for 800 victims of Safe Hands fiasco

When my elderly Aunt Fay, my mother’s sister, was in her final state of illness, she had one lingering concern.

The savings she had set aside after many years of modest work as a sales assistant in the women’s department of Debenhams in Brighton should be used to ensure she was given a traditional Jewish funeral and a suitable granite memorial stone.

She wanted to be buried at Meadow View cemetery in Brighton, high in the South Downs, where her father, mother and several siblings were buried.

Planning the funeral you want is a worthwhile expense for many people. No responsible person wants his death to become a burden on those he leaves behind, or to be denied the goodbye he imagined due to a lack of money.

The vacuum in supply and lack of regulation around funeral plans until the city’s regulator the Financial Conduct Authority (FCA) brought it under its umbrella last year made it a worrying playground for scammers.

None more so than provider Safe Hands, which went bankrupt in March 2022, leaving 46,000 policyholders without any cover.

With the bulk of the funds disappearing offshore to the Cayman Islands and elsewhere, Safe Hands and its founders are now under investigation by the Serious Fraud Office.

Veteran insurance entrepreneur Sir Peter Wood, 77, who took control of Dignity, the country’s largest regulated funeral provider, earlier this year after a £281m bid, has minced no words when it comes to Safe Hands’ conduct and other case providers.

“They’re worse than bank robbers and probably the Great Train Robbers,” he tells me.

When Safe Hands crashed, Wood stepped in to do the right thing. “Some of this involved rescuing Safe Hands customers for free or at a heavily subsidized rate.” Dignity has a celebrated history dating back to 1812 and was responsible for the funerals of cricket legend WG Grace and wartime Prime Minister Winston Churchill, among others.

As Dignity’s new owner, Wood felt he had no choice but to take it a step further. With the blessing and tacit support of the FCA, Dignity has provided free funerals for 800 former Safe Hands customers and offered or provided rescue plans for 65,000 families who were customers of Safe Hands or other failed providers.

There may be no better person than Wood to restore confidence in Britain’s badly damaged funeral and insurance sector. Wood has a star-studded resume. He is the founder of insurer Direct Line, which changed general insurance forever by making it easy for customers to interact with providers personally by eliminating brokers.

As the father of six daughters, he founded Esure, which specializes in serving female drivers. He was one of the first financiers of the price comparison website GoCompare and invests in the American insurer Plymouth Rock. Wood is also a patriot who loves great British brands. For many years he was the largest shareholder in the totem model train manufacturer Hornby.

He now has a major stake in philately icon Stanley Gibbons, is among Britain’s biggest personal taxpayers and has saved Margaret Thatcher’s suit collection for the nation. He vows that the inheritance tax on his almost £800 million fortune will be paid entirely in Britain. Not exile in Monaco for him.

As he tries to turn around Dignity, which made a £156m loss in 2022, Wood is deeply irritated. Picking up the pieces of Safe Hands has come at a significant financial cost and he worries the company has “inherited the reputational damage that should have been inflicted on others.” His company is flooded with “unwarranted complaints and one-star reviews.”

He understands the pain, but is concerned that Dignity, which has stepped into the breach as a market leader, is now paying too high a price.

Abandoned: Safe Hands and its founders are now under investigation by the Serious Fraud Office

In addition to offering free funerals to those most directly affected by regulatory changes – and the governments that followed – Dignity has so far offered discounted plans to 4,000 others to the tune of £2.2 million. But the bills are mounting. In addition to providing early assistance to those who have been abandoned, Dignity offered to offer similar funeral plans in exchange for earlier installments that customers had paid in previous plans.

It is now clear that the alleged fraud at Veilige Handen has created an increasingly large black hole and that only cents in previous premiums from the manager may be returned.

So far the voluntary rescue has run up a bill of £19 million, excluding administration costs. To add to Dignity’s problems, many of the disgruntled former customers of Safe Hands and other smaller providers have taken their complaints to the Financial Ombudsman Service (FOS).

It awards damages of around £750 per policy, potentially leaving Wood and his co-investors exposed to a bill that could total £45 million.

The paradox is that all of Dignity’s actions since it stepped in to help have been backed by the Financial Conduct Authority. It was pleased to see Dignity taking some responsibility in a crisis where the regulator bears a historic debt. The complaints are gaining momentum and the FOS seems to think it’s Wood’s job to suck them up and pay for them.

He recognizes the tremendous pain that individual policyholders and families experience as they prepare for the unknown of death. All of this “hurts deeply,” Wood says, and “I understand customers’ feelings.”

But rising costs are stalling the investment needed to improve facilities and provide decent burials at Dignity.

FCA regulations have been critical in cleaning up an industry that has tragically affected families at one of the most sensitive stages of life from cradle to grave. It would be unconscionable to leave those affected without the protection they hoped for. But Dignity should not be expected to pick up the tab alone.

It is the duty of an advanced and caring society to establish a safety net to ensure that the fear associated with death is not exacerbated by undeserved financial hardship.