Our Comprehensive Guide to Funeral Plans, Are They Worth It?

One in five funerals in the UK is now paid for by a funeral plan. But what exactly does that mean?

A funeral plan is a way for you to have a say in the funeral you want while protecting your family from the shock of unexpected expenses at a time when they are graving.

You do this by paying for part of your funeral while you are still alive with a provider of your choice, either with a lump sum or small payments spread out over a longer period of time.

Looking for other information on funeral plans? This guide has info on 'How do pre-paid funeral plans work?' We have also written extensively about:

• - Are funeral plans regulated?
• - How much do funeral plans costs?
• - How many funeral plans can you have?
• - Monthly Funeral plan costs explained
• - What happens if I die midway through the plan?
• - Funeral plan - vs - life insurance - what is the difference?

We update all our guides regularly. If you are researching funeral plans and we haven't got an exact guide that helps you, keep coming back as we update daily.

What Is a Funeral Plan?

A funeral plan is a way to pay upfront for your funeral to ensure that your relatives aren’t faced with unexpected costs when you die. It also allows you to ensure that your wishes are met by specifying what kind of funeral you would like.

Exactly what is included in a funeral plan varies from provider to provider. However, most of the major expenses are taken care of.

They are normally available to the over-50s. However, there are a small number of plans available for younger people.

It is possible to pay for a funeral plan in one lump sum or to spread the cost over a longer period of time in order to make payments more manageable.

Number of Funerals Paid For With a Funeral Plan, by Year

Source: Funeral Planning Authority

What Is and Isn’t Included in a Funeral Plan

In most cases, a funeral plan covers the cost of essentials, but it not totally comprehensive.

Exactly what is included varies depending on the provider, and it is important to make sure you understand what you are paying for before you sign up. However, in most cases a funeral plan includes provisions for:

• Care, cleaning and transport of the body
• Use of the chapel of rest
• A coffin and hearse of your choosing
• Assistance from the funeral director on the day of the service

Some funeral plans may also include a limousine for transporting close family, crematorium fees and payment for the officiant or clergy who will conduct the service. Several also include burial fees, but these may be capped, due to the fact that the cost of burials is rising head off inflation and varies wildly depending on where you live.

Many funeral plan providers have a range of plans, with their most expensive options offering the most comprehensive cover. 

However, there are certain things which even the more expensive funeral plan on the market tend not to include. This may be because they are better chosen by family at the time of the funeral, or because the cost or availability of the items are expected to change over the coming years. Things which are rarely part of a funeral plan include:

The burial plot. The cost of burial plots varies widely up and down the country, and their availability is difficult to predict. For this reason, they are rarely included as part of a funeral plan and if you would like to reserve one, you need to do so by directly contacting the authority which oversees the burial ground.

• A headstone or memorial plaque
• Embalming
• Costs related to the wake, such a venue hire or catering
• Optional extras such as obituaries, floral tributes or copies of an order of service

How Much Does It Cost?

The cost of a funeral plan depends partially on what is included, and partly on how you choose to pay. It is often cheaper to pay upfront, rather than spreading the cost over a series of instalments.

Most funeral plans cost between £3000-£5000. Within this price range, it is possible to get a fairly comprehensive plan which includes all of the standard features as well as a generous burial fee cap, transportation for mourners and unlimited mileage on the transport of the body from the place of death to the funeral home.

If you choose to spread the cost of your payments over 12 months or longer, you should expect to pay around 10% more overall.

What Are the Pros and Cons of a Funeral Plan?

How Do You Pay for a Funeral Plan?

There are several different ways you can pay for a funeral plan, making them accessible for people with a variety of financial circumstances.

Upfront: Paying up front in a single lump sum is the cheapest way to pay overall, and guarantees your plan straight away.

Pay in under 12 months: Many funeral directors will allow you to spread the cost of a funeral plan over several months. If you can pay it all off in under 12 months, you are unlikely to have to pay any additional fees for the benefit of spreading your payments. Instalments over 1-25 years:

If you can’t afford to pay for a plan upfront, you can choose to spread the cost over a longer period of time up to 25 years. The plan provider may charge you around 10% extra overall to allow you to spread your payments. If you die before you have paid for the plan in full, your family will need to

Can I Personalise My Prepaid Funeral?

When you take out your prepaid funeral plan, you will sit down with a funeral director and go through the details of your funeral. At this point, you will be able to personalise the ceremony, the coffin and other issues surrounding the day.

This is your time to make your wishes clear, ensure everything is documented, and there is no confusion. Many families have fallen out due to disagreements regarding family funeral - this is a time when tensions and emotions are often running high.

Should I Take Advice About Prepaid Funeral Plans?

Yes. While prepaid funeral plans are covered by the Funeral Planning Authority, this is an industry body, not a UK appointed regulator. There are plans to bring prepaid funerals under the Financial Conduct Authority umbrella which should hopefully come into play very soon. So, when looking at a funeral plan, it is best to take advice from an independent financial adviser.

Where Do I Complain About a Prepaid Funeral Plan?

If you have any complaints about a prepaid funeral plan, you should address these to the Funeral Planning Authority. Alternatively, trading standards or citizens advice would be able to assist, or you can always take legal advice. Even though prepaid funeral plans are not currently regulated there are numerous ways in which you can register a complaint.

What Happens if I Miss a Monthly Premium?

If you miss a monthly premium on a prepaid funeral plan, you will likely be given, for example between 30 and 60 days to rectify the missed payment. Even though the provider would have the right to cancel your policy as soon as payment was missed, why would they?

Despite the fact that the cost of funerals will increase year-on-year, the policy would be priced so that they make a profit. However, if you have long-term financial issues, then you may need to cancel the policy - ask your provider about a potential partial repayment of premiums.

Is an Over 50s Life Insurance Plan the Same as a Prepaid Funeral Plan?

No.  An over 50s life insurance plan will payout on death to named beneficiaries. A prepaid funeral plan will payout upon your death, but the funds will be sent directly to the appointed funeral director to cover the cost of your funeral.

Many people will take out life insurance (often to cover outstanding debt such as a mortgage) and a prepaid funeral plan. It is worth noting that both of these payments are free of any tax under normal circumstances.

What Happens if My Family Lose the Prepaid Funeral Documentation?

On occasion, people will lose documentation, and it may be difficult to contact the prepaid funeral provider. Thankfully, the Funeral Planning Authority has a trace a funeral plan service which will allow you to trace the details of all prepaid funerals taken out through one of their members.

At this point, it is also worth noting that the funeral director in charge of your funeral will already have details of your prepaid funeral on record.

Who Can Get a Funeral Plan?

Most funeral plans are aimed at the over-50s. However, there are a small number of providers who offer plans to adults of all ages.

It is never too late to purchase a funeral plan, though you should be aware that if you decide to pay in instalments and die before you finish paying for the plan, your family will need to top up the remainder in order to use your funeral plan.

Is Your Money Protected?

Funeral plans are not currently regulated by the Financial Conduct Authority, which oversees most financial products in the UK. This means that, unlike savings accounts, the money you pay to a funeral provider is not protected if the company goes bust.

However, funeral directors can volunteer to sign up to the UK’s Funeral Planning Authority (FPA), which sets minimum standards and ethics for providers to adhere to. If an FPA member goes bust, the organisation will work to make sure that another provider takes on your plan, so your investment isn’t lost.

You can check to see whether a provider is a member of the FPA here.

What Happens if You Die Before You’ve Paid in Full?

In cases where someone pays in instalments but dies before they have completed the payment plan, their family can top up the remaining balance to get access to the full plan.

They may do so using their own money, or cash from the estate of the deceased. There is no need to wait for probate to formally begin to do this because funeral expenses are free from inheritance tax. This means that families can use assets left by their loved ones to pay for an outstanding funeral plan right away.

However, there is no obligation to continue with a funeral plan put in place before someone died.

Most policies come with an exit clause, which allows family members to forgo the plan and recover the money paid in by their loved one after paying a small lump sum to the funeral provider.

What Happens if You Change Your Mind?

If you change your mind at any point, you may be able to recover most of your investment. Most plans come with an exit clause, which allows the family of the deceased or the plan holder to cash in the funeral plan and forgo the services for a fee.

The fee may be anything from £100-£800 and varies depending on the provider.

What Happens if You Die in Another Part of the Country?

Many people start to think about funeral plans while they still have plenty of years ahead of them- and it is not uncommon for someone to move to another part of the country years after they first took out their plan.

In some cases, this could cause an issue. Many smaller funeral directors impose limits on the distance they are willing to drive in order to collect a body. Nation-wide providers may be more willing to relax these limits, however many still have caps.

Higher-end funeral plans are less likely to have restrictions like this in place.

If you travel widely up and down the country or expect to move house in your later life, it is important to ask a prospective plan provider about any such limits.

UK Regional Funeral Plan Price Increases

The below chart shows the regions in the UK with the highest percentage funeral cost increase; the average cost and the costs per funeral for the next couple of years based on the average percentage increase the industry has seen.

Based on these numbers, it’s no wonder that more and more people are looking to lock-in the price of a funeral using a funeral plan.

Couple this with the Financial Conduct Authority about to take charge of regulating the industry which will provide consumers with more peace of mind about their money the sector looks set for a huge increase in plans.

However, consumers need to understand that most pre-paid funeral plans don’t cover absolutely everything associated with a funeral, so, sadly, there could still be some additional fees to pay.

If you are planning on setting up a pre-paid funeral plan, conducting some research is key. The critical research points are;

• What does the pre-paid Funeral plan cover?
• What does the pre-paid funeral plan NOT cover
• What are the monthly costs associated with the plan
• How safe is my money
• Am I getting the best deal possible?

We have tried to answer as many of the questions as possible, so continue reading and get the full details.

The Costs of Funerals Are Rising

It is no secret that in the UK the costs of funerals are rising, with many people struggling to afford to pay to appropriately bury their loved ones or plan for themselves. According to research carried out by Golden Charter, funeral costs in the UK have increased by more than 100% over the last decade, meaning more and more people are being squeezed by the costs of arranging a funeral.

What Does a Prepaid Funeral Plan Cover?

The idea of a funeral plan is to ensure there is a more affordable and efficient way in which to pay for a funeral or cremation when the time comes. More people than ever are looking to unburden their families when it comes to the costs of a funeral, which can cost more than £5,000 and more than £4,000 for a cremation in the UK. Thus, taking out a funeral plan allows you to pay for the cost of a funeral or cremation over the course of months and years, spreading the debt over a longer and more affordable timescale.

UK funeral plans (depending on the precise arrangement with the plan provider) can routinely cover the costs of:

• Funeral directors
• Minister fees
• Cremation fees
• Religious services
• Hearse, limousine or funeral vehicle
• Coffin or casket

Although as you may expect, a funeral plan does incur interest, the shorter the period over which you pay, the lower the interest in likely to be. Funeral plans can be spread over periods potentially as long as five years or more.

Compare Funeral Plans

As with any financial product or arrangement, there are various funeral plan provider in the UK that can provide the plan you need for a funeral or cremation. You should always shop around to find the best package that works for you, your finances and your needs. We work with some of the UK’s best funeral plan providers, which allows us to source some of the best funeral plan deals available in the UK.

Whether the applicant is looking to be buried, cremated, scattered or otherwise, there is a funeral plan available to suit all needs and preferences. Furthermore, most providers can make arrangements for religious services as well as themed funerals, depending upon preference.

Because we work with various providers, you don’t need to go to numerous individual providers to get the best deal for you and your loved ones.

How Do I Pay for a Funeral Plan?

Without a prepaid funeral plan in place, you or your family can expect to be laden with large bills for the various elements to consider for a funeral at what will undoubtedly be a very stressful time. Rather than having to worry about the various components that you will need for a funeral or cremation, a funeral plan ensures everything is arranged and in place in advance of any funeral.

Although you can pay for a funeral plan in a single lump sum, a more popular option is to pay over the course of 6-12 months or even over as long as 20 years or more. This means that for a smaller monthly fee, everything you and your family would otherwise worry about when it comes to death is taken care of and in conveniently in place for you.

How Can Money Savings Advice Help You With a Funeral Plan?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Funeral Plan brokers. They have already helped thousands of people get the best Funeral Plan deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.