Pricey: Sir Peter Wooden says payments are mounting as Dignity helps these left excessive and dry
When my aged Aunt Fay, my mom’s sister, was in her closing sickness, she had one abiding concern.
The financial savings she had put apart after a few years of working modestly as a gross sales assistant within the ladies’s division at Debenhams in Brighton needs to be used to ensure she had a standard Jewish burial and an appropriate granite memorial stone.
She wished to be laid to relaxation at Brighton’s Meadow View cemetery, excessive within the South Downs, the place her father, mom and several other siblings have been buried.
Planning for the funeral you need, for many individuals, is an expense value paying for. No accountable individual needs their demise to be a burden on these they depart behind or be disadvantaged of the send-off they imagined due to a scarcity of funds.
The vacuum in provision and a scarcity of regulation round funeral plans, till Metropolis regulator the Monetary Conduct Authority (FCA) introduced it underneath its umbrella final yr, made it a distressing playground for swindlers.
None greater than supplier Secure Arms which fell into administration in March 2022 leaving 46,000 policyholders excessive and dry with none cowl.
With a lot of the funds disappearing offshore to the Cayman Islands and elsewhere, Secure Arms and its founders at the moment are underneath investigation by the Severe Fraud Workplace.
Veteran insurance coverage entrepreneur Sir Peter Wooden, 77, who took management of Dignity, the nation’s largest regulated funeral supplier earlier this yr after a £281 million bid, doesn’t mince his phrases in the case of the behaviour of Secure Arms and different fallen suppliers.
‘They’re worse than financial institution robbers and possibly the Nice Practice Robbers,’ he tells me.
When Secure Arms crashed, Wooden stepped in to do the fitting factor. ‘A part of that concerned rescuing Secure Arms clients totally free or a closely subsidised worth.’ Dignity has a feted historical past relationship again to 1812 and amongst different issues was answerable for the interment of cricketing legend W G Grace and the wartime Prime Minister Winston Churchill.
As the brand new proprietor of Dignity, Wooden felt there was no different alternative however to step up. With the blessing and tacit assist of the FCA, Dignity has offered free funerals for 800 former Secure Arms purchasers and provided or offered rescue plans for 65,000 households who have been clients of Secure Arms or different failed suppliers.
There could also be no higher individual than Wooden to revive belief within the UK’s badly broken funeral and insurance coverage business. Wooden has a star-studded CV. He’s the founding father of insurer Direct Line which modified normal insurance coverage for ever by making it straightforward for purchasers to deal personally with suppliers by eliminating brokers.
As the daddy of six daughters, he based Esure specialising in serving ladies drivers. He was an early backer of worth comparability web site GoCompare and is an investor in US insurer Plymouth Rock. Wooden is also a patriot who loves nice British manufacturers. For a few years he was the most important shareholder in totemic mannequin prepare maker Hornby.
He now has an enormous stake in philately icon Stanley Gibbons, is among the many UK’s largest private taxpayers and has saved Margaret Thatcher’s costume assortment for the nation. He vows that the inheritance tax on his close to £800 million or so fortune will probably be paid totally within the UK. Not for him exile in Monaco.
As he seeks to show round Dignity, which ran up losses of £156 million in 2022, Wooden is deeply irritated. Selecting up the items of Secure Arms has come at a substantial monetary price and he worries that the agency has ‘inherited the reputational injury that ought to have been hooked up to others’. His firm has been inundated with ‘unjustified complaints and one-star critiques’.
He understands the anguish however is anxious that Dignity, having stepped into the breach as an business chief, is now paying too heavy a worth.
Let down: Secure Arms and its founders at the moment are underneath investigation by the Severe Fraud Workplace
In addition to offering free funerals to these most instantly affected by regulatory modifications – and the administrations which adopted it – Dignity has to date offered discounted plans to 4,000 others at a price of £2.2 million. However the payments are escalating. In addition to providing early assist to these left excessive and dry, Dignity provided to supply like-for-like funeral plans in return for previous instalments paid by clients into earlier plans.
It’s now clear, due to the alleged fraud at Secure Arms, there’s an ever bigger black gap and solely pennies could also be returned in previous premiums from the administrator.
To date, the voluntary rescue has run up a invoice of £19 million excluding the price of administration. Simply so as to add to Dignity’s issues, lots of the dissatisfied former clients of Secure Arms and different smaller suppliers have taken their complaints to the Monetary Ombudsman Service (FOS).
It’s awarding compensation of round £750-per-policy probably exposing Wooden and his fellow buyers to a invoice which might whole £45 million.
The paradox is that each one Dignity’s actions, because it stepped in to assist, have been supported by the Monetary Conduct Authority. It welcomed Dignity taking some accountability in a disaster the place the regulator bears some historic blame. The complaints are gathering momentum and the FOS appears to assume it’s Wooden’s job to suck them up and pay.
He recognises the super harm to particular person policyholders and households as they put together for the unknown of demise. This all ‘hurts deeply’, Wooden says and, ‘I perceive the sentiments of consumers.’
However spiralling prices implies that the funding required in upgrading services and offering respectable funerals at Dignity is stalled.
FCA regulation has been important in cleansing up an business which tragically has affected households in one of the delicate of life’s passages from cradle to grave. To go away these affected with out the safety they hoped for could be unconscionable. However Dignity shouldn’t be anticipated to choose up the invoice alone.
It’s the obligation of a sophisticated and caring society to place in place a security web to make sure that the anguish which comes with demise isn’t made worse by undeserved monetary privations.
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