Funeral Plan provider, Safe Hands has withdrawn its application for authorisation and has now fallen into administration, leaving as many as 45,000 policyholders at risk.
Pre-paid funeral plans will come under the supervision of the Financial Conduct Authority from July this year and those who provide and advise on them will need to be authorised by the financial regulator.
Many argue that the failure of Safe Hands highlights why the sector needs to be regulated and because there is no formal compensation scheme for failed companies, it is hoped that some of the more established providers may be willing to assist with problems in the sector through this period of transition.