Funeral Plans

About 20% of funerals are now paid in advance with a prepaid funeral plan. These plans offer peace of mind by allowing you to arrange and fund your funeral in advance, securing today’s prices and reducing future stress for your family.

Here are some of the main points covered:

Learn how plans lock in current prices and outline your burial or cremation preferences in advance
Discover protection against cost inflation, but also potential downsides like limited portability or non-refundable policies
Compare providers, check contract terms to ensuring transparency and value
There are alternatives to pre-paid plans such as flexible savings accounts and payable-on-death (POD) insurance

Choosing the right funeral plan or deciding not to prepay can significantly affect not just your future finances, but also the emotional burden on those left behind.

Paying for a plan over many years is often not a good idea as you are normally charged interest. However, the exception to this is if you were to die within two years of paying for the plan. In this case the plan provider has to offer a full refund.

What is a funeral plan?

A funeral plan is a financial product that will allows you to pay in advance for your funeral at today’s prices. This helps protect against rising costs, ensures your wishes are respected, and spares family members the stress of arranging and paying for everything at an already difficult time.

Financial conduct authority regulation

Since the 29th July 2022 funeral plan providers have to be regulated by the Financial Conduct Authority (FCA). This also means that intermediaries such as funeral directors can no longer receive commission payments for selling funeral plans. Additionally there is a compensation scheme through the FCA, this provides cover if the plan provider were to become insolvent.

If you are going to buy a funeral plan check the Financial Services Register (FSR) to see if the plan provider is listed and has permission to “enter into a funeral plan contract”. This can be found in the section “what can this firm do in the UK”.

If it is not on the list, it could be a representative of the plan provider. If this happens find out who the plan provider is, and check that they are registered on the FSR. You could find out who is the plan provider by asking the company selling the plan.

If you need to complain about a plan provider contact the Financial Ombudsman Service (FOS).

Key points when comparing different funeral plans

A funeral plan is generally worth taking out if

You do not have to borrow money – To take the plan out, and you can pay the fees without any interest (if paying by installments).
You want to be cremated – Most plans include cremation fees – Your next of kin or family would find it difficult to deal with sorting out a funeral and likewise paying for one. Either they would not have enough money, or you would not have left enough to cover the cost of a funeral.

It’s generally not worth taking out a funeral plan if

You intend to move area – Most plans will allow you to move, however, may have to pay increased fees with a new undertaker local to where you are moving.
If you have to get into debt to pay for the plan – Avoid debt where ever you can
You intend to move abroad – The plan will not cover you
The plan repayments are over many years which include interest payments – The total cost may outweigh what the plan is worth.

What is generally included

Transporting and caring for the deceased
Visiting the deceased in a chapel of rest
Coffin and funeral director fees
Hearse to transport the coffin to the service
An allowance towards or all of the cremation fees

What is not generally included

Burial plot fees – These can be literally thousands, so it’s important to make inquiries and check different council burial fees.
Spokesperson to read eulogy
Headstones and memorials – These again can literally be thousands
Order of service booklets
Flowers
Catering for a wake

Fees which often vary between being included or not

Spokesperson to read the service
Embalming
Limousines for mourners
Doctors fee for cremations – Not applicable in Scotland

Possible restriction

The day and time of day for the funeral.

It is very important to see what is covered and what is not covered when comparing costs. For example one provider may seem cheaper as their advertised cost may start at a lower level than others, but then say plus additional services. When these extra services are added on they may total more than another plan provider for a like-for-like service.

The other thing to bear in mind is that some plan providers may be cheaper at offering a cremation, but their burial service may be significantly higher than others.

With Grace (WG) offers both cremation and burial funeral plans. Their aim is to provide clients with quality low-price local funeral plans in the UK.

In common with other providers PWG offers:

Guaranteed acceptance
No medicals
Pay-in-full
Monthly payment funeral plans

For example their lowest cost “Direct”cremation plan service includes, nationwide collection, family support & guidance, undertaking fees, hearse, bearers, fees, doctors fees, cremation fees, and return of ashes as standard. Their other three attended plans include different upgraded opions such as:

Upgraded coffin
Choice of day and time
Spokesperson
Hearse and bearers

Compare providers

It is always sensible to check exactly what a plan covers as costs can change. Likewise, it is always a good idea before buying a plan to shop around and compare other leading plan providers such as:

Aura Funerals – Unattended Direct Cremation
Golden Charter Funeral Plans – Standard Plan

For example, Golden Charter offer burial or cremation on their Standard Plan. If you were thinking of burial this may work out cheaper than other plans, depending on what you would like included.

Important points for a funeral plan

Check that your chosen plan provider is listed on the FSR and provides national coverage.

Searching for funeral plans can be overwhelming. Inquire if the plan provider uses local undertakers relative to each area, as this is often best for the customer.

When you’re searching online for cheap funeral plans you want to know that you’re getting the best possible deal and service for yourself or your loved one. In general, anyone over 18 can take out a funeral plan, although some companies restrict the age to over 50 and under 80.

The main selling point of a plan is that the cost is fixed; so that if for example you were to die twenty years after taking the plan out, your next of kin would not have to pay any additional costs. However, not all plans cover burial (plot fees) and cremation fees. These third-party costs can increase significantly over the years, so it’s important to see if your plan does cover these fees.

Additionally, check if a provider can offer easier payments by arranging monthly instalment’s. WG for example, offer up to two years interest free, or a one-off payment. WG instalment payments between three and five years are presently charged at 6.5% interest.

Alternatives to a funeral plan

Rather than committing to a fixed funeral-plan provider, you might prefer the freedom of setting up a designated savings account in for example a building society. Term life insurance which pays on death (POD) or whole-of-life policies serve as another option offering a payout without commiting to a funeral plan.

Term life insurance vs Whole-of-life

Term life insurance which is payable-on-death (POD) can be a low-cost way to leave money for funeral expenses. This type of insurance does not normally require a medical but it only pays out if you die within the set policy term. If you live longer nothing is paid. Whole-of-life insurance is more expensive, but it guarantees a payout when you die, as long as you keep up the premiums. These two alternatives offer a reliable way to set money aside for a funeral without being tied to a prepaid plan.

For further helpful information covering different aspects of funerals from poems, flowers, bereavement gift ideas, what to wear at a funeral, low-cost headstones and much more, visit the Save Funeral Costs™ blog.