UK house prises continue to rise due to a shortage of
family homes, the Halifax reports
Despite the worst recession since the second world war, the
price of the average home in the UK has rocketed by £43,577 since the start of
the first lockdown two years ago, the Halifax has said.
The UK’s biggest mortgage lender, part of Lloyds Banking
Group, said the 18.2% rise increased the cost of an average home to £282,753.
Buyers seeking more space saw a 21% rise in the price of
detached homes compared with a 11% rise in flat prices over the same period.
Higher mortgage rates will start to reduce buyer
affordability and the amount people can borrow, which may dampen prices.
Increased living costs will inevitably affect how much
first-time buyers can save, borrow and spend on a property.
As we enter the traditional springtime buyer activity
season, estate agents are already reporting continued demand and a shortage of
larger family houses, which means sellers can obtained higher prices.
Funeral plan provider goes bust – what do you now if you
have a prepaid plan?
Following the recent utility providers bankruptcies, another
inflation-led disaster is brewing in the funeral industry. Safe Hands, a UK
‘prepaid funeral plan’ provider, has collapsed into administration, leaving
thousands of customers worried about what to do now, plus many others concerned
that other companies will follow suit amid soaring costs and inflation.
The latest scandal follows Financial Conduct Authority (FCA)
belated announcement that it will start regulating firms that provide and
arrange prepaid funeral plans from 29 July this year – shutting the door after
the horse has bolted.
After this date, should a funeral plan provider fail to meet
the FCA requirements, they will not be allowed to sell plans or carry out
funerals. Ironically, this could have the effect of pushing more firms into
bankruptcy.
Prepaid funeral plans are constantly advertised on daytime
TV encouraging people to pay in advance for a future funeral.
But if the firms get their sums wrong or the cost of
providing the funeral rises sharply, as it is right now, they could fail to
meet their obligations.
For this reason, it is safer to stick with nationally known
reputable companies that you are confident will be around for many years to
come.
Insurance vs Prepaid Funeral Plans
The other way of providing for future funeral costs is the
traditional method of taking out insurance which pays out on your death. Whilst
the sum is guaranteed by regulated insurers, the amount you have insured your
life for may or may not be sufficient to cover the cost of a funeral at least
you know that it will be paid out.
Personally, I have far more confidence in insurance
companies, like Legal and General and Sun Life, that have been around in some
cases for over a hundred years than a funeral plan provider.
Insurance companies are heavily regulated and employ
actuaries to calculated liabilities years into the future. They also have
reserves which can see them through the bad times like world wars, recessions
and depressions.
Funerals can easily cost in excess of £5,000 excluding the
burial plot, but the price of everything has soared in the last year due to
inflation and material shortages.
Safe Hands, Dignity Funerals Limited will provide existing
customers with funeral care arrangements until 20 April 2022, and customers
should contact the customer services team on 0800 640 9928. There is no
confirmed plan in place after 20 April.
Customers can make claims as creditors in the administration
process, as the company does not have sufficient funds to be to issue any
refunds or meet its obligations, and existing contracts are considered as “cancelled”
– just like that. Safe Hands customers will be contacted by post with details
of how to make a claim.
Customers are unlikely to get much out of the administrators
after they have paid debts and collected their hefty fees, however, you paid
for any part of your funeral plan by credit card, you may be able to claim
under Section
75 of the Consumer Credit Act 1974.
Customers should cancel their direct debits/standing orders
with immediate effect and try to retrieve recent payments under the DDM
guarantee. Watch out for the vulture scam callers.
Should you be called by someone claiming to be from Safe
Hands Plans, FRP Advisory or any other company claiming to be involved in the
administration, hang up and call the freephone helpline of the administrators
(Monday to Friday 9am-5pm) on 0800 640 9928 or email safehands@frpadvisory.com.
Worryingly, six funeral plan providers have not even
applied for authorisation
See the FCA website to find a published
list detailing which firms have yet to apply for authorisation, as
well as those who are transferring their books to other providers.
There are six companies who have not yet applied for
authorisation are:
·
Fox Milton and Co Ltd trading as
Unique Funeral Plans
·
The Independent Funeral Partnership – this
is part of Memoria Ltd, which has submitted an application. Memoria Ltd trades
as Low-Cost Funeral Limited and Affordable Funerals. The Independent Funeral
Partnership is in the process of potentially acquiring another provider
that has already submitted its application to the FCA.
The FCA is encouraging anyone thinking of buying a prepaid
funeral plan to avoid doing so from one of these four companies, until they
have clarified whether they intend to apply for FCA authorisation:
·
Iberian Funeral Plans
·
Not For Profit Funeral Plans
·
PS Cremations Funeral Planning Limited
·
Sovereign Lifecare
If
you already have a funeral plan with one of these providers, you should get in
touch with them as soon as possible to find out your options.
There are 15 firms transferring plans to other providers and
each of these will be contacting their existing customers in due
course. Check if
your funeral plan is with one of these companies, and get in touch with your
current provider for more information.
There are a further two firms who have withdrawn their
applications. However, both Eternal Peace Funeral Plans Ltd and Aura Life
Limited have confirmed they plan to resubmit their applications to the FCA.
If your provider does not get authorised by the FCA you
have no protection from the FSCS should your funeral plan provider go into
administration before 29 July, or if it has its FCA application refused.
The FCA is working with funeral plan providers to ensure
customers’ plans are transferred to another provider before 29 July, if the
company isn’t likely to receive authorisation.
In the meantime, customers will have greater protection when
taking out a prepaid funeral plan on or after 29 July this year.
At very least, make sure the provider is registered with
the Funeral Planning
Authority, which provides a form of non-compulsory self-regulation, which
means providers that sign up have to adhere to “certain rules” and a “code of
practice”.
Source: Clair Casalis, MSE.
Other Financial News
NI tax rises kick in, most employers and employees will pay
an extra 1.25p in the pound, but lower paid will pay less due to recent
threshold changes in Rishi Sunak’s budget.
Economic
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