August 11, 2022

The Mail on Sunday as we speak raises critical considerations about the way in which funeral firm Protected Arms handled clients’ cash earlier than it collapsed. 

Our investigation into the Yorkshire-based agency – which had 47,000 clients when it went below six weeks in the past – discovered bosses have been skimming off money from the belief fund that was meant to pay for funerals. 

We are able to reveal that the belief fund had plunged £3.7million into the pink – despite the fact that the cash was alleged to be ring-fenced and guarded.

Firm accounts scrutinised by the MoS present cash from this important belief fund was routinely being paid into Protected Arms’ common firm coffers. The corporate was then paying massive sums of cash to its shareholders. 

Sufferer: Kim Sharp says the corporate needs to be renamed Unsafe Arms

In a single 12 months, £2million of ‘surplus’ money was paid from the belief fund to the corporate. That very same 12 months, £2million was additionally paid in dividends from the corporate coffers to its shareholders. 

Information at Firms Home verify that almost all shareholder previous to the corporate’s acquisition by SHP Capital Holdings in early 2020 was Malcolm Milson. 

An unbiased actuarial report, ready by Zenith Actuarial and obtained by the MoS, additionally raises considerations over the funding administration of the £60 million belief fund. It queries a shortfall within the funds made into the fund (from money given to Protected Arms by planholders) and the quantity actuaries ‘would have anticipated’.

Having inadequate cash put aside to pay for funerals that Protected Arms had promised to clients in the end pushed the corporate to the purpose of collapse. 

Tens of hundreds of individuals had given Protected Arms greater than £3,000 every, after being informed it might save their households the effort of paying for a funeral after they died. 

However clients have now been despatched letters warning they’re unlikely to get the funerals they paid for. Lots of of victims have contacted this newspaper following our reporting of the rising scandal over the previous six weeks. 

As we report reverse, many are aged – the common age of plan-holders is 70 – and really feel betrayed. 

A giant promoting level of the plans was that clients’ cash was protected in a safe ring-fenced belief fund, overseen by unbiased trustees and managed by a good funding supervisor.

Fears: MP Lucy Allan will raise it in Parliament

Fears: MP Lucy Allan will elevate it in Parliament

Lucy Allan, Conservative MP for Telford in Shropshire, has a enterprise background. 

She contacted The Mail on Sunday final week, following our studies. Just like the MoS, she has examined the accounts of Protected Arms, based mostly in Wakefield, West Yorkshire, and doesn’t like what she has seen. 

She mentioned: ‘If Protected Arms’ planholders’ entitlements should not honoured it might undermine the belief and confidence in the entire funeral plans trade.’ 

Allan added that strain must be dropped at bear on trade leaders to discover a answer ‘that protects plan-holders and the integrity of the sector’. Main gamers embody the Co-op, Dignity and Affluent. 

Up to now, the Authorities has refused to intervene. It factors to imminent regulation of the trade by the Monetary Conduct Authority as proof of its dedication to create a sector match for objective. 

John Glen, Financial Secretary to the Treasury, has mentioned that bringing the trade into regulation will expose ‘unsustainable enterprise fashions’ and stop any issues ‘from getting worse and impacting extra customers’. Allan mentioned she could be elevating the Protected Arms scandal in Parliament as quickly because the Easter recess ends in 9 days’ time.


Like a majority of funeral plan suppliers, Protected Arms put most clients’ funds right into a belief fund – the Protected Arms Plans Belief. Deductions have been made for commissions paid to third-party sellers. 

As clients verify above, the belief fund was a giant promoting level because it gave them reassurance that their cash could be safeguarded. Plan literature promoted this level.

It knowledgeable clients the belief could be ring-fenced (separate from the primary Protected Arms enterprise), managed by unbiased trustees, and the cash invested by skilled fund managers. 

It mentioned: ‘As one of many UK’s premier funeral plan suppliers, it’s of paramount significance to us… that our clients’ investments are secure and safe.’ 

However accounts for Protected Arms Plans, filed at Firms Home, counsel the belief was used to supply dividends to firm administrators, depleting the belongings obtainable to pay for planholders’ funerals. 

The accounts do state the agency had the ‘proper’ to those surpluses – whereas having an obligation to make good any fund deficit if it arose. 

So, for the 12 months to the tip of Might 2018, the accounts verify that £2million of belief fund surplus – the distinction between belongings and liabilities – was used to spice up the agency’s earnings. The identical quantity was then paid in dividends to shareholders.

Within the earlier 12 months, the agency’s earnings benefited from the switch of simply in need of £1.17million from the belief fund with firm dividends paid of £1.13million. 

The accounts additionally present that director Malcolm Milson, appointed on the finish of July 2017, obtained consultancy charges of £110,400 in addition to having an interest-free mortgage from the corporate of simply in need of £3.5million. 

Additionally, a debt for £114,444 due from companies managed by ‘the director’ (Milson was one among two for many of the 12 months) was written off as a result of the quantities ‘weren’t recoverable’. 

Though the accounts for the following two years don’t disclose equal data, they do verify that belief surpluses have been skimmed off in 2019 (£200,000) and 2020 (slightly below £2.4million). 

Milson left the corporate in February 2020 when it was taken over by SHP Capital Holdings.


On the finish of January this 12 months, actuary Zenith Actuarial produced an unbiased report on the Protected Arms Plans Belief. The report doesn’t pull punches. It raises quite a few considerations, notably a fund shortfall or deficit of £3.7million. 

In different phrases, the belongings of £60.7million are inadequate to cowl the longer term price of funerals promised (£64.4million). 

It additionally factors out a shortfall within the anticipated contributions into the fund – and is alarmed about how the fund’s belongings are invested by the fund supervisor. 

These are investments initially made by an adviser earlier than being taken over by the fund supervisor. 

It says: ‘We stay very involved concerning the funding funds and the potential lack of liquidity, specialist focus, excessive prices and potential points regarding divesting.’ 

The truth that the funding funds are largely based mostly within the Cayman Islands is famous by Zenith.

‘It’s a shame. Like many Protected Arms victims we are able to’t afford to lose our money’ 

This scandal must be resolved.’ That was the blunt message final week from Janet Denham – one among 47,000 victims of the Protected Arms Plans funeral firm collapse. 

Many have contacted The Mail on Sunday to vent their anger over the potential lack of the cash they entrusted to the agency to make sure their funeral could be paid for after they died.

It’s a view echoed by everybody we now have spoken to caught up on this mounting scandal, from these like Janet of their 60s to clients of their 80s. All of them need to know why the belief fund they put their cash into – overseen by unbiased trustees – doesn’t have sufficient belongings to pay for the funerals they have been promised. 

Janet, a piano instructor, took out a Protected Arms funeral plan three years in the past. ‘Each my dad and mom had dementia and on the finish it was a nightmare finding out their funds,’ says the 62-year-old from Bordon, Hampshire, who’s divorced and has a 31-year-old daughter. ‘I vowed then that I wouldn’t put my daughter via what I skilled. So I turned to a will author, up to date my will and thru them purchased a Protected Arms funeral plan for £3,880.’ 

The letter final month from the directors of Protected Arms, informing her (and all different clients) that the funeral she had paid for wouldn’t be honoured, has left her devastated. 

‘I can’t imagine what has occurred,’ says Janet. ‘With hindsight, I want I had put the £3,880 in a money Isa or stored it in my checking account. By no means in 1,000,000 years did I count on Protected Arms to renege on its promise. I really feel cheated and may’t bear occupied with the very fact I might need misplaced all my cash. I’ll by no means purchase such a plan once more.’ 

Like Janet, Kim Sharp, from Orpington in South-East London, purchased a plan to make sure her kids wouldn’t have to fret about her funeral preparations if something occurred to her. 

Kim, additionally 62 and divorced, reminded her three kids the place her plan particulars have been stored when she contracted Covid and ended up in hospital. Having made a full restoration, she has now been rocked by the information that her Protected Arms plan might be nugatory. ‘Unsafe Arms is extra to the purpose,’ she says. 

Kim, a former retailer supervisor, purchased her plan six years in the past after seeing a few shut associates die. She paid in instalments, reaching a complete of £3,395. ‘I used to be happy with myself,’ Kim says. ‘The coverage coated the price of all funeral preparations other than flowers, so my youngsters wouldn’t have to fret concerning the expense.’ 

She was reassured by the very fact her funds could be held in belief. The Protected Arms literature she obtained mentioned her cash could be held in a ‘ring-fenced belief fund’ overseen by unbiased trustees and managed by a ‘multinational funding administration agency’. She says: ‘I by no means thought the plan was something however rock strong secure.’ 

Having taken early retirement through the pandemic, she now will get by on an annual pension of £12,000. She says there is no such thing as a manner she might afford one other plan. ‘What has occurred at Protected Arms is a scandal and it wants resolving,’ says Kim. She has contacted her native MP, Gareth Bacon, who has promised to look into the matter. Jayne Moore, a 56-year-old credit score controller from close to Nottingham, took out a plan three years in the past – similtaneously her dad and mom, each of their early 80s, bought plans.Like Kim, Jayne has written to her MP, however has but to get a response. 

See also  VICTORIA BISCHOFF: It’s now or never to save cash!

‘One thing must be executed to get our a reimbursement,’ she says. ‘My dad has most cancers and it’s so distressing for him. He’s an astute particular person and when he purchased the plans he did his homework and skim all of the small print. He was satisfied by what he learn. 

‘Outdated and susceptible folks like my dad and mom have been taken for a experience. Once you’re informed your cash is secure in a belief fund, you count on that to be the case. I’m appalled – folks have been let down in spectacular trend by Protected Arms.’

Sylvia Sutherland, from Caithness, has a Protected Arms plan with associate David Seaman, 71. It was meant to cowl the funeral prices of whoever died first. They purchased it six years in the past for practically £4,000. 

‘We scrimped and saved to pay the month-to-month premium,’ says Sylvia, 59, who can not work due to again issues. David is retired after working part-time for a fishing firm. 

Sylvia says: ‘I used to be furious after I received the letter from the directors saying the belief fund didn’t find the money for to fulfill the price of all of the funerals promised.

‘You attempt to do the most effective issues in life and defend your kids from worrying about finding out your funeral – and you then discover out your hard-earned money was not as secure as you have been informed.’ 

Sylvia provides: ‘It’s a shame. Like a variety of different folks caught up on this Protected Arms scandal, we can not afford to lose our cash.’


The truth that Protected Arms’ belief fund was in deficit would have been sufficient for the Monetary Conduct Authority to inform the corporate it might refuse its software to be authorised from the tip of July – thereby giving Protected Arms the chance to withdraw from the method. 

That is what occurred in mid-February with the FCA confirming the corporate had withdrawn its software. It then issued a stark warning: ‘Don’t purchase a brand new funeral plan from this agency.’ 

Late final month, Protected Arms collapsed, resulting in the appointment of directors FRP Advisory. In a be aware to planholders, FRP alarmed clients by saying the authorized construction of a number of the belief fund’s belongings was ‘difficult’ and it was uncertain which might be realised for the advantage of planholders. 


Final week, The Mail on Sunday tried to contact Richard Philip Wells, a director of SHP Capital Holdings, by electronic mail and telephone for a proof of the poor well being of the belief fund. He didn’t reply. 

The administrator FRP declined to remark, though it’s finishing up an in depth investigation into the failure of Protected Arms Plans. 

Senior folks at Protected Arms have been requested by FRP to attend interviews concerning the corporate’s collapse. Failure to attend will result in them being required to go to courtroom and be questioned below oath. 

Sterling Belief Company, which sorted the belief fund, mentioned it was ‘working carefully’ with the directors to discover a answer that helps funeral planholders. 

The FCA mentioned: ‘Individuals who purchased a pre-paid funeral plan with Protected Arms will likely be understandably involved. The Authorities modified the regulation to carry pre-paid funeral plans below our regulation from the tip of July. Till then, these corporations are unregulated and we now have restricted powers.’