What is a funeral plan and how do they work?
A funeral plan lets you arrange and pay for your funeral in advance and at today’s prices. Pre-arranging the services of a funeral director this way and making the arrangements now can make things easier for family when the time comes, both financially and emotionally.
The services included in the plan vary depending on the type you choose and the provider, and the cost which is based on today’s prices is fixed, so will never increase.
Types of funeral plan
Most companies offer a range of basic, simple, standard and superior prepaid funeral plans that provide cremation or burial services. Some of the costs will be guaranteed, others will include an allowance towards them. This means there could be more to pay when the time comes.
The majority of prepaid plans will usually include and guarantee:
- Transportation and care of the deceased
- The funeral director’s services
- A cremation or burial service
- A hearse
- Either a guarantee or an allowance towards the third party costs
In addition, you can expect the following services depending on the type of plan you choose:
- A superior plan - a superior coffin, 2 limousines
- A standard plan – a midrange coffin, 1 limousine
- A simple plan – a simple coffin
- A basic plan – a basic coffin. These plans often include a smaller allowance for third party costs or nothing at all. In addition, the day and time of the funeral service may be limited or decided on by the funeral director.
Alternatively, you can choose a prepaid direct cremation plan which includes a simple unattended cremation without a funeral service, leaving the family free to say goodbye their way. Although this option is usually unattended, some plans allow a restricted number of mourners to attend the committal.
More about third party costs
Third party costs, also known as disbursements include the cremation or burial fees, minister or officiant’s fees and the doctor’s fees.
If these costs are guaranteed, there will be nothing more to pay for these services when the time comes. If they are paid for using an allowance which usually increases in line with inflation, there is a possibility there could be more to pay. It all depends on the size of the allowance compared to the third party costs when the time comes.
Did you know, that the 2024 SunLife Cost of Dying Report, showed that the average cost of a funeral in 2023 was £4,141
What is not included in a prepaid funeral plan?
It's worth noting that prepaid funeral plans are designed to cover the basic elements of a funeral, but this does not include all funeral costs. Additional services such as embalming, memorial stones, stationary, flowers and the wake would need to be paid for separately.
And although plans include burial fees (or an allowance to help with these costs), this doesn’t include the actual burial plot.
Is my money secure with a prepaid funeral plan?
All prepaid funeral plan providers are required to be authorised by the Financial Conduct Authority (FCA), the regulatory body for financial services in the UK. Authorised companies must abide by the FCA’s rules and standards ensuring customers are treated fairly and their money managed responsibly.
Being regulated by the FCA means customers have access to the Financial Services Ombudsman should they wish to complain about the service they have received and the Financial Services Compensation Scheme should the plan provider be unable to meet their obligations.
To check your chosen funeral plan provider is FCA authorised, take a look at our table above. Or just go to the FCA’s website.
FCA regulated funeral plan providers
Is it better to have a funeral plan or life insurance?
A funeral plan lets you arrange and pay for your chosen services in advance, removing some of the worry from your family. Life insurance will provide a cash sum when you die that can be used to help cover funeral costs, but your family will still need to make the arrangements.
Over 50 life insurance is a type of guaranteed life insurance that includes the opportunity to have the cash sum paid directly to a funeral director. Your family will still need to make the arrangements and pay any additional fees but it’s an option if you want to help with funeral costs.
What is over 50 life insurance
Over 50 life insurance pays out a cash sum when you die that your family can use to help with funeral costs, or however they prefer. You pay a fixed monthly premium either for life or until you are 90 and you are covered for the cash sum after the initial waiting period of either one or two years (depending on the plan provider).
Get a quote from £4 a month
How much do prepaid funeral plans cost?
Prepaid funeral plans cost between £3,000 to £4,500, or from £1,200 for a prepaid direct cremation plan with the following payment options to choose from:
Paying in full – the cheapest way to pay as you don’t incur any additional fees. Once you have paid, the services included in your plan are guaranteed with nothing more to pay.
Paying over 12 months – Many UK funeral plan providers allow you to spread your payments over 12 months without incurring additional fees. If you were to die before completing the 12 instalments, your family would need to pay the outstanding balance.
Monthly instalments – payments can be spread between 1 to 25 years depending on the company you choose and your age. As long as your monthly premiums are up to date, your services will be guaranteed once you have paid into the plan for an initial waiting period of either 1 to 2 years**. So if you were to die after the initial waiting period but before your instalments are complete, your services as detailed in the plan would be provided with no charge to your family.
What age can you buy a funeral plan?
With many funeral plan providers, you need to be at least 18 years old to apply although some only accept customers who are 50 years of age or older.
You also need to be a UK resident; other than that, your application is guaranteed to be accepted.
My top tips for buying a funeral plan
If you’re considering buying a funeral plan, my top 6 tips are designed to help you find the right plan for you:
Compare prepaid funeral plans
- If you can afford it, paying for your prepaid plan in one go, or over 12 months (if no additional fees) is the cheapest option
- Check the plan can be moved if you change address and if there are any associated costs. If you want flexibility, you may also want to check if the company offers nationwide coverage.
- Understand the pros and cons and be sure the servies are guaranteed so you can budget for additional services if required.
- Only choose a company that is FCA authorised. If they are not authorised, they are not legally allowed to sell you a funeral plan.
- Check funeral plan reviews. Some plan providers have better customer ratings than others.
- Tell your family you have bought a plan, so they know what to do and who to contact when the time comes.
- Can I choose either a burial or cremation funeral?
- Can you buy European funeral plans?
European funeral plans are available for people that live or have second homes in Spain, Portugal, Cyprus and the Canaries. They can provide cover for arranging a funeral either there, or here in the UK.
- Do I need to choose my Funeral Director now?
Funeral plan providers use the services of certain funeral directors. For example, Co-op funeral plans use co op funeral directors and Dignity funeral plans use Dignity funeral directors. The plan provider will usually choose one of their panel of funeral directors based on where you live. If you have a specific funeral director you prefer to use, check which funeral plans they accept.
- What if I move home?
Plans provided by national funeral planning companies are flexible and portable, so if you move, the plan moves with you. You simply contact your funeral planning company to let them know your new address and they will move the plan to a funeral director local to your new home.
Some companies may charge for this service though, so it could be worth checking before you buy your plan.
- Can I tailor the plan to include my personal requirements?
When you buy a plan you are typically getting a specific set of services. Some plan providers will allow you to add or change services such as extra cars or a different coffin, but these will incur additional charges.
Personal wishes such as requests for music, readings or poems can be added for free and will help your family understand what you would have wanted when the time comes.
- Can I buy a plan for someone else?
- Do I need a medical to buy a Funeral Plan?
- Do I have to be over 50 years of age to purchase a plan?
- Can I get an eco-friendly or green funeral plan?
- What happens if I die abroad?
If you die whilst abroad your repatriation cover on your travel insurance if you have it would get you back home and then the funeral director will provide the funeral services as outlined in your prepaid plan.
Alternatively if the family decide to have the funeral abroad, they can cancel the plan and receive a full refund minus the cancellation fee.