‘We are in shock… Safe Hands has treated us with contempt’: Huge sums of money borrowed from firm’s funeral cash pot to buy commercial property
Huge sums of money were borrowed from the trust fund that was meant 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 taken from the fund to buy a number of commercial properties – even though the trust fund was supposed to be ring-fenced and used explicitly to pay for funerals.
The discovery of the loans comes a week after The Mail on Sunday revealed sums from this supposedly safeguarded trust fund were routinely paid into Safe Hands’ general coffers (£2million in the year to the end of May 2018, £1.17million the year before) and then passed on as dividends to directors.
We are in shock… firm has treated us with contempt
Disgust: Pat and Ernest Hughes paid £3,395 into the Safe Hands plan
Ernest and Pat Hughes paid Safe Hands £3,395 three years ago to ensure all their big funeral costs would be met when the first one of them died.
The couple, who live in Llandudno, North Wales, asked for their money back when rumours surfaced that Safe Hands was in financial trouble. Ernest, 83, says: ‘They rang back and promised our money would be returned within 28 days minus a cancellation fee.’
He adds: ‘We waited and waited – and then called them again. We were told it had gone bust. We were in shock.’
The retired washing machine engineer is disgusted with what has happened. He says: ‘Safe Hands has treated elderly, vulnerable people with utter contempt. How the trust fund that our money was held in is now under water is a scandal.’
A petition has now been launched demanding that the Government set up an emergency fund to support victims of failed 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 each around £3,000 – will be honoured.
Industry insiders do not rule out the collapse of other plan providers as they fail to pass strict financial tests imposed by the Financial Conduct Authority, ahead of regulation at the end of July.
The Mail on Sunday today publishes more evidence about the way customer money was handled by Safe Hands. We can reveal that money was borrowed from the trust fund by SHFT Properties in the period 2018 to 2020 to purchase a number of commercial properties.
According to accounts filed at Companies House, these borrowings rose in value 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 set up by a former director of Safe Hands who resigned more than two years ago.
Its sole director is now Richard Philip Wells who is also a director of SHP Capital Holdings, the owner of Safe Hands. Financial information is not available on whether the loans to the trust fund have been paid back.
But a report on the financial position of the Safe Hands Plans Trust published early this year by independent actuary Zenith does confirm there are outstanding loans of just over £1.1million.
As reported last week, Zenith confirmed the trust fund had a deficit of £3.7million at the end of May 2021.
In other words, it did not have enough assets to meet the cost of all the funerals customers had bought.
On Friday, Howard Hodgson, chief executive of funeral plan provider Memoria told the MoS: ‘I am absolutely appalled by the Safe Hands situation. What has happened is an utter betrayal of the trust that Safe Hands’ customers put in the company.’
We asked Sterling Trust Corporation, trustees of the Safe Hands fund, to comment on the loans. It did not respond.
To date, five plan providers have withdrawn their application to be authorised from the end of July.
But none, other than Safe Hands, have so far been barred from selling new plans.
The petition can be signed at: https://petition.parliament.uk/petitions/614579.
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