Money from Safe Hands funeral was used to buy commercial property
‘We are in shock…Safe Hands treated us with contempt’: Huge sums of money borrowed from company’s funeral fund to buy commercial property
Huge sums of money have been borrowed from the trust fund to cover the cost of funerals sold by collapsed plan provider Safe Hands, The Mail on Sunday can reveal.
Loans worth millions of pounds were drawn from the fund to buy a number of commercial properties – although the trust fund was meant to be segregated and used explicitly to pay for funerals.
The discovery of the loans comes a week after The Mail on Sunday revealed that sums from this supposedly protected trust fund were regularly paid into the general coffers of Safe Hands (£2million for the year to the end of May 2018, £1.17 million the previous year) then passed on as a dividend to the directors.
We are in shock…society has treated us with contempt
Disgust: Pat and Ernest Hughes paid £3,395 into Safe Hands plan
Ernest and Pat Hughes paid £3,395 to Safe Hands three years ago to ensure that all of their large funeral costs would be covered when the first of them died.
The couple, who live in Llandudno, North Wales, asked for reimbursement when rumors surfaced that Safe Hands were in financial trouble. Ernest, 83, says: ‘They called back and promised our money would be returned within 28 days less a cancellation fee.’
He adds: “We waited and waited – then called them back. We were told he had gone bankrupt. We were in shock.
The retired washing machine engineer is disgusted with what happened. He says: “Safe Hands treated the elderly and vulnerable with complete disregard. The way the trust fund where our money was held is now under water is an outrage.
A petition has now been launched calling on the government to set up an emergency fund to support victims of bankrupt funeral plan companies. The petition requires 10,000 signatures before the government must respond.
Safe Hands collapsed last month, leaving 47,000 customers unsure whether the plans they bought from the company – costing them around £3,000 each – will be honoured.
Industry insiders are not ruling out the collapse of other plan providers as they fail to pass the strict financial tests imposed by the Financial Conduct Authority, ahead of regulation at the end of July.
The Mail on Sunday is today publishing more evidence of how customers’ money was handled by Safe Hands. We can reveal that money was borrowed from the trust fund by SHFT Properties between 2018 and 2020 to purchase a number of commercial properties.
According to accounts filed at Companies House, these borrowings fell from just over £1.25million at the end of October 2018 to £1.3million two years later.
The money was used to buy properties in West Yorkshire (Barnsley, Batley and Wakefield where Safe Hands was based) and Consett in County Durham.
SHFT Properties was started by a former director of Safe Hands who resigned over two years ago.
Its sole director is now Richard Philip Wells, also a director of SHP Capital Holdings, owner of Safe Hands. No financial information is available on whether the loans to the trust fund have been repaid.
But a report on the financial situation of the Safe Hands Plans Trust published earlier this year by independent actuary Zenith confirms that there are outstanding loans of just over £1.1million.
As reported last week, Zenith confirmed that the trust fund had a deficit of £3.7million at the end of May 2021.
In other words, he didn’t have enough assets to cover the cost of all the funerals the customers purchased.
On Friday, Howard Hodgson, chief executive of funeral plan provider Memoria, told the MoS: ‘I am absolutely appalled at the situation at Safe Hands. What happened is a complete betrayal of the trust that Safe Hands customers place in the company.
We asked Sterling Trust Corporation, trustee of the Safe Hands fund, to comment on the loans. He did not answer.
To date, five plan providers have withdrawn their applications for authorization from the end of July.
But no one, apart from Safe Hands, has so far been blocked from selling new plans.
The petition can be signed at: https://petition.parliament.uk/petitions/614579.