A prepaid funeral plan lets you pay for the main elements of a funeral in advance, either for yourself or someone else potentially saving your family stress and expense when the time comes. Things like a coffin, collection and transportation, and funeral director professional services are usually covered, but burial/cremation fees may not be, so it is important to check what is and is not included in the plan.
Why have a prepaid funeral plan?
Having a prepaid plan in place typically means that those close to you may have less to organise for your funeral and they will know more about the type of funeral you want; for example, what clothes to be dressed in, service location, music, readings, etc., and any special requests and wishes. Some or all of the costs may be covered by the funeral plan.
Types of prepaid funeral
The types of prepaid funeral plan available fall typically fall into three categories:
Burial funeral: A traditional service with family and mourners in attendance at the burial.
Cremation funeral: A traditional service with family and mourners in attendance at the crematorium.
Unattended/Direct Cremation funeral: A cremation with no family or mourners in attendance.
Funeral plans cover different elements within it, for example, there will be different inclusions and exclusions across different products and different providers.
Certain fees, such as cremation and burial fees, have to be paid for in order for a funeral to take place. Depending upon the funeral plan, cremation and burial fees may or may not be included.
Plans can usually be taken out by anyone aged 18 or over. If you want to pay via monthly instalments there might be an upper age limit.
Are costs of the funeral plan protected against inflation?
For costs that are ‘guaranteed’ in your funeral plan, your funeral plan is protected against inflation (these elements are included in the plan and you should not have to pay any more for these services at the time of redemption).
However, some costs that are provided from a third party (like burial and cremation fees) are not ‘guaranteed’. If these have risen and aren't covered in full by your funeral plan, the person responsible for arranging the funeral will have to make up the difference. It’s important to understand exactly what is fully covered or guaranteed as part of your purchase process.
If there is a shortfall (e.g., there is no cover for burial/cremation costs), then any shortfall will typically need to be paid for at the time the plan is redeemed. Certain fees such as cremation and burial fees have to be paid for a funeral to take place.
How do you pay for a funeral plan?
Funeral plan providers tend to have various payment options, please check all terms and conditions.
Lump sum: Paying for the plan in a one-off payment at the price with no additional instalment fees.
Payment by instalment: There are some key differences when you pay by instalment. For example, a moratorium period may apply to your funeral plan. This means that if the Covered Individual dies before the end of the moratorium period, the remaining balance of the funeral plan will still be required to be paid. However, if the Covered Individual dies after the moratorium period, the remaining balance should be paid out by your funeral plan provider. In addition, when you pay by instalment, you typically pay more overall than you would do if you paid upfront.
Maximum age: Providers can offer payment period ranging from 12 months up to a period of up to 25 years. Usually, providers will have a maximum age for the Covered Individual by which all instalment payments must have been made by this time.
Can anyone buy a funeral plan?
Funeral plans can usually be taken out by any UK resident aged 18 or over, though some providers limit plans to the over-50s. Typically, there are no health restrictions and no credit checks If you want to pay via monthly instalments, but there might be an upper age limit on the Covered Individual if you are paying by instalment.
What is the cost of a funeral plan?
The costs of a funeral plan vary by provider and will depend on what type of funeral you choose and the inclusions and exclusions. You will need to do some research to find the product that meets your needs.
Can I buy a funeral plan for someone else?
Yes, many funeral plans are purchased for a spouse, parent, grandparent, friends or other relatives to help with end-of-life planning. Check they do not already have a funeral plan in place. If you are buying a plan for someone else, you will be the customer and you will be responsible for payment. You should also seek the consent of the person you are buying a funeral plan for, so that they are aware of your intentions. Some providers do not allow you to purchase on someone else’s behalf, so check the terms and conditions of each provider and each individual funeral plan product.
Do funeral plans include the cost of burial fees, burial plot and headstone?
This varies by plan type and provider. You will need to ensure you read the inclusions and exclusions of the plan before making a purchase.
Burial funerals typically cost more than cremations, some providers may include a provision within the plan towards burial fees, but the cost of a burial plot and headstones is so variable that these costs will usually not be included.
This means that if you buy a burial funeral plan, your loved ones will likely need to put extra money towards the burial, burial plot and any memorial headstone required when the plan is redeemed.
Before you buy a plan, make sure you understand what is and isn't included.
Do funeral plans include all funeral costs?
This varies by plan type and provider. You will need to ensure you read the inclusions and exclusions of the plan before making a purchase.
Any shortfall will need to be paid for at the time the plan is redeemed. Certain fess such as cremation and burial fees have to be paid for a funeral to take place. Please read the terms of your selected Funeral Plan carefully so that you know what is and is not covered.
Do funeral plans include cremation fees?
This varies by plan type and provider. You will need to ensure you read the inclusions and exclusions of the plan before making a purchase. Some providers include the cost of the cremation fees but you may have no choice in location or date. Other providers allow you to select a crematorium of your choice and they guarantee the costs within the plan price.
Alternatively, the funeral plan may include a financial contribution within the plan price that may require a top up at the time of need, or the plan may allow you to place a voluntary contribution of your own into the so this contribution can be used at the time of need.
Can I cancel a funeral plan?
Yes, providers should allow you to cancel your funeral plan. But you will need to check the terms and conditions of the specific provider as the fees for cancelling a plan can range from zero to hundreds of pounds.
Is my money safe with a funeral plan?
The Financial Conduct Authority (FCA) regulates all funeral plan providers and this also means that all funeral plans are protected by the Financial Services Compensation Scheme (FSCS). In the event your funeral plan provider goes out of business, you'll either get a funeral or you'll get a refund.
Can I make a complaint about a funeral plan product or provider?
Yes. You should pick this up with the funeral plan provider in the first instance. You may want to check their website for their complaints policy. In addition, if you fail to satisfactorily resolve the complaint, you can escalate it free of charge to the Financial Ombudsman Service (FOS).
If you move home can you change your nominated funeral director?
When you buy a funeral plan, you'll need to choose or tell the provider which funeral director you want to take care of the arrangements, or they will nominate for you and confirm. If you later move from the area registered to your plan, you'll need to see if you can change funeral directors. Many plan providers allow this penalty-free, but some charge a fee.
It will also depend on whether your provider works with funeral directors in the area you're moving to.
Plans normally specify how far a funeral director will go to collect the deceased. This can vary, but what counts is whether there's a funeral director willing to take on your plan. Some providers work with a large number of directors, so its collection mileage is limited to 25, whereas others will go up to 50 miles.
If your provider doesn't work with any funeral directors in the new area, you might have to cancel your plan.
Another important reason to inform your provider if you move home is so that you can continue to receive correspondence from them.
Is a funeral plan worth it?
No one wants to talk about funerals, but future planning can provide comfort for you and your family, knowing that you have made a financial provision and recorded your wishes so you can have your funeral, your way. Typically, some elements of the funeral plan are fully covered or guaranteed, meaning you should not have to pay any more for these services at the time of need.
According to the Sun Life Cost of Dying report 2024, only 21% of people in the UK have prepaid for their funeral and less than1% of people know all of their loved one’s funeral wishes.
Arranging a funeral for a loved one can add to the stress of bereavement, especially if the deceased had never discussed their plans or wishes.
A pre-paid funeral plan may reduce the financial burden and allows you to record your personal wishes. So, you can plan all the details of your funeral and the service ahead of time and answer questions for when the times comes.
The good news for anyone considering buying a funeral plan is that, as of July 2022, all funeral plan providers in the UK must be authorised and regulated by the Financial Conduct Authority. Your money is protected by the Financial Services Compensation Scheme.
A funeral plan may not be suitable if:
You have already made provision for your funeral. For example, you already have a funeral plan, or you have funeral insurance cover.
You have specific faith or religious requirements, which may not be provided for by the plan. For example, cremation within 24 hours of death.
Your financial circumstances mean that purchasing a funeral plan may place you in financial difficulty.
Is a funeral plan good value?
The price of funerals vary and can go up or down in the future and there are different ways to pay for a funeral, for example through savings, Over 50s products or funeral plans. It depends on what type of funeral you would like and your own demands and needs in terms of investments.
The cost of funeral plans can vary depending on where you live and what products and services are included in the plan price.
Having a funeral plan in place can ease the financial and emotional burden on your family when the time comes. Having a plan with a financial contribution and all your funeral wishes recorded may provide peace of mind.
Next steps
If you would like to discuss your funeral plan requirements we can introduce you to our trusted Funeral Plan partner who offer Choice Funeral Plans. Please see the ‘I want to plan ahead for my funeral’ section on the website to arrange an appointment.