Funerals: Pre-payment

Treasury written question – answered on 1st July 2021.

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Photo of Rosie Cooper Rosie Cooper Labour, West Lancashire

To ask the Chancellor of the Exchequer, what steps his Department is taking in preparation for the upcoming Financial Conduct Authority (FCA) regulations of prepaid funeral plans to ensure that people who have purchased plans from suppliers that fail to receive FCA approval will receive an equal plan from another provider or get a refund.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

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.

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