Prepaid Funeral Plans
What are prepaid funeral plans? Are they worth it?
The death of a loved one is always difficult. Add to this rising funeral costs which now average £4,300 for the essentials and the aftershocks can be considerable. Increasing numbers of people are now taking out funeral plans so they know most of the cost of their funeral has been covered before they die, to ensure their family isn't left to foot a hefty bill. We take you through all you need to know.
This is the latest incarnation of this guide. Please give us your feedback, suggest improvements and share your tips in the Funeral Plans forum post.
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Funeral Plans: The 10 need-to-knows
A fifth of all UK funerals are now paid for in advance via a funeral plan, so when you die, your family will have less financial and/or organisational responsibility. Plans allow anyone over the age of 50 (18+ with some plans) to pay for and set out the arrangements of the major components of your funeral now – eg, hearse and ceremony – so you can guard against inflation and rising costs. However, they do have their pitfalls and things to watch out for, so here's all you need to know.
Beware of dodgy companies mis-selling plans
There have been reports of widespread mis-selling in this industry, with vulnerable people being cold-called and pressured into buying over-priced plans not right for them, with unscrupulous companies taking a hefty chunk of anything paid into a plan as commission. There have also been nasty shocks for grieving families who find out there is still so much to shell out for as a loved one’s plan doesn’t cover everything.
The industry is not officially regulated, but there is a voluntary organisation set up by the industry to regulate providers called the Funeral Planning Authority (FPA), which companies can choose to sign up to. It says 95% of funeral plans are offered by its registered providers, which must abide by a set of rules and code of practice. So always ensure a provider is signed up to the FPA – as those mentioned in our Best Buys section below are.
It’s important to do your own research to ensure the plan is right for you – and if you even need a plan at all – and don’t fall for companies trying to lure you in with promised discounts making you rush into a decision.
What is usually covered in a funeral plan?
You buy the plan from a funeral plan provider (see best buys below), choosing from the different types of packages – a basic can cost £3,000 and a top package with much more included up to £4,000. When the time comes your family should let the plan provider or funeral director know you've passed away so arrangements can be made.
Many providers will let you choose a cremation or burial funeral plan. The initial costs are similar, but watch out for costs that won't be covered.
What's usually included:
- Care of the body
- A coffin and hearse and funeral director personnel
- Transport of the body to the funeral home
- A minister to conduct the ceremony
- Visiting the body in a chapel of rest
What's sometimes included, depending on the plan:
- Doctor's fees (although these aren't needed in Scotland)
- Minister's or celebrant's fees
- Limousines for mourners
- Complete fees for the crematorium
What's generally not included in a funeral plan:
- Memorial, death and funeral notices
- Order sheets
- Burial fees including cost of burial plot (this can cost £1,000s) and digging a grave
- Catering and other costs for a wake
- A head stone
Always check exactly what is and isn't included in the plan before you buy as every plan has its differences.
A basic funeral plan can cost around £3,000, though what this covers will be fairly limited and just include the essentials, such as a simple coffin, a standard funeral procession route, a set day and set times the family can visit the chapel.
The most expensive funeral plan can cost over £4,000 and is a lot more flexible. For example, you'll get a coffin made with more luxurious materials, two or more limousines for your family, flexible visits to the chapel and a choice of funeral day, as well as dedicated family bereavement support.
Can I plan every detail of the funeral?
Depending on how much you're willing to pay, when buying the plan you can also tell the provider exactly what you want included in your funeral – from the type of coffin, specific music played, even the food you want served. Some of these extras won't necessarily be paid for within the plan, it's just written down so your family are aware when the time comes – so you'll need to let your family know they might need to pay extra for this.
Can you choose your own funeral director?
Some funeral plan providers let you pick your own funeral director, who will arrange the funeral – though they usually have a list to choose from. Others will pick one for you. If it's important to you that your funeral is organised by a particular funeral director, then check with the plan provider and/or the funeral director that you can do this before you buy it.
Plans can guard against inflation and rising prices
All plans guarantee to cover funeral director services as specified in the plan, eg, care of body and coffin and hearse, even if the prices increase in the future. Some also guarantee to pay for all non-funeral director costs such as the cremation and minister or celebrant's fee, while others only give an allowance , so if prices have gone up by the time of the funeral, it may not cover it all and the family or estate would have to pay the difference.
Obviously it is a financial gamble as we don't know what the prices of funerals will be like in the future. But a big boon of paying for your funeral now is that if prices do rise in the future, the funeral director services are protected against inflation.
For example, if you buy a funeral plan which costs £3,000 today, but don't die for another 10 years. If in that 10 years the cost of everything increased (which is likely) and now the same funeral costs £5,000, as your funeral plan is protected, your family won't be asked to pay the £2,000 difference.
Warning: The UK funeral industry is under investigation for high prices. There has been huge controversy over the prices of funerals and the way they have been sold to the recently bereaved. The Competitions and Markets Authority (CMA) has launched an investigation which could put the brakes on rising costs, meaning any savings from buying pre-paid plans may not be as great in the future.
Is a funeral plan worth it?
Providers claim that pre-paid plans are cheaper than their equivalent 'at need' funerals and they're are keen to capture future business.
Pre-paid prices are not necessarily lower than at need prices in every case. The UK's largest funeral provider, Co-operative Funeral Care, charges pretty much the same for a basic pre-paid cremation funeral as a similar at need one at virtually £3,000.
It's worth shopping around comparing at need and pre-paid prices in your area.
Plans range from around £3,000 to £4,000. Optional extras eg, wake, flowers, more limos, notices can add up to £2,000 more.
What are the pros of funeral plans?
Buying a plan in advance of need when there's time to shop around and when the purchase can be made in what's presumably a calmer, more rational state of mind will take the pressure off your family financially and emotionally.
The Competition and Markets Authority is so concerned that grieving friends and family have been taken advantage of when someone has passed away, it has launched a price probe into funerals bought at need. We'll report back once it has its findings.
A plan will enable you to be in control of key elements of your funeral and save your family the organisational responsibility.
If you can afford the premiums now, funeral plans can help cash flow problems for your family in bereavement. Even if you've set aside funeral money, your family may not be able to access it in time to pay the bills if they have to wait for due legal process.
Choose a plan that gives you as much cover as you're going to need so your loved ones aren't faced with surprise bills for excluded items or services.
Some funeral plans particularly for cremations may allow you to pay a price that's been flattened out to work across the UK, even though you're in a more pricey location.
Be aware that burial plots have a big impact on cost and can vary by £1,000s. Plots are not included in funeral plans. Plot pricing is all down to location both within the UK and within the burial ground itself. London is by far the most expensive place to be buried but within a cemetery anywhere, some spots are more sought after and therefore pricier. Green burial costs also vary for the same reasons.
If moving elsewhere is a real possibility, you should examine any plan before you buy to see what charge, if any, will be incurred if you do end up in a different place.
Some plans will payout even if you haven't paid all your premiums.
Currently, the Co-operative Funeral Care claims to be the only provider to give a UK-wide promise that if someone buys one of its plans but passes away after a year, the Co-op will pay for the funeral, even when there are still outstanding payments. This commitment only applies on 2-25-year plans that would have been paid off before the plan holder reached 80.
It's a good idea to check what other providers do as they change policies to stay competitive.
Currently five-year fixed savings rates beat inflation but shorter, easy access savings don't. We can't tell what will happen with inflation and you will need to take a view on when the funeral might be needed. Once you've done your sums, you may be able to work out whether protecting against possible funeral inflation is more important to you than earning interest by saving instead.
If you decide to set aside money for a funeral into a savings account, let your family know what you want the money to be used for. But your family would still have to make all the arrangements themselves and could find there is not enough to cover the price of a funeral at the time.
What are the cons of funeral plans?
If the Competition and Markets Authority's investigation into prices in the funeral industry means prices come down for funerals bought at the time of need, it could mean that you end up overpaying by getting a funeral plan. It could also mean that pre-paid plans go down. It's a gamble.
There are, of course, other reasons beyond just the price for paying in advance (and we've listed these above in the pros of plans.) It's important you work out what's right for you and your family.
You don't have to use a funeral director at all so you could save a significant amount if you're willing to organise the separate elements of a funeral yourself. A very simple cremation funeral involving collecting the deceased, an ordinary coffin, cremation and the ashes being handed over is about £1,700, with an average of £1,000 more for burials.
The table gives average prices (except where we've been more specific) for key elements in both cremation and burial funerals. Some costs may be covered already such as holding the body in a hospital mortuary.
Collecting body £500 (for collecting from a care home or own house or out of hours but less from a mortuary during working hours) Cremation £750 Doctors' certificate £164 (only needed for cremations, but two are required) Minister or celebrant (not compulsory) £150 Coffin suitable for cremation £200 Cardboard coffin for burial £200 Burial plot £800 to £8,000 depending on location Grave diggers £300
One of the key sales points on funeral plans has been price rise protection, but if you’re going to need a funeral shortly, this factor on its own isn't a significant advantage.
If you think you or your family will be able to compare prices and keep a cool head after a loved one has passed away, you may not need to buy a plan.
Burial and cremation costs behave in a similar way to property: they're all about location, location and location. If the funeral is going to take place in a less expensive area, you may find small providers giving cheaper prices for funerals bought at the time of need than larger, more well known companies which to have national pricing strategies with their plans.
Some plans may not cover you for costs if the body has to be brought back over a certain distance typically 30 or 50 miles and some will only allow funerals in the area you bought it, so if you are planning on moving, a plan might not be right for you.
Your money isn't protected like a savings account
The key thing to understand about this market is it is not regulated. This means your money isn't protected like in a savings account – where the first £85,000 is protected in the event of the bank or building society going bust – although discussions are ongoing to see whether this is an option.
However, there is a voluntary organisation set up by the industry to regulate providers called the Funeral Planning Authority (FPA), which companies can choose to sign up to. It says 95% of funeral plans are currently offered by its registered providers, which must abide by a set of rules and code of practice.
Every funeral plan provider, whether FPA-registered or not, must legally invest the money to pay for the funeral separately from the provider in either an insurance policy with a regulated insurer, or in a trust fund with independent trustees. This should mean if anything happens to the provider the money is ring-fenced and protected, so you won't lose it.
If you buy a plan from an FPA-registered provider, then as part of its checks, the FPA will ensure the provider has invested your money properly. It'll also help with any complaints you have. In the best buys below, we only feature providers signed up to the FPA.
Your money being ring fenced doesn't necessarily mean your funeral will still be covered if the funeral plan provider went bust, though if the provider is registered with it, the FPA will endeavour to make sure your funeral is delivered by another of its registered providers across the UK. Depending on the contract the provider had with the funeral director, if the provider went bust it might just mean all your money is returned to you, and you no longer get the funeral you wanted.
It's not a legal requirement for providers to be registered with the FPA, but most funeral plan providers including the big ones such as the Co-op, Dignity and Golden Charter (which covers many small independents) are signed up and consequently are subject to external scrutiny. You can find out if your provider is registered on the FPA website.
What if I have a complaint?
If you have a complaint about the plan provider, you can take it to the FPA to resolve if you have no luck with the plan provider first. They can engage an arbitrator to settle your dispute, and the resolution is then legally binding. Even if it doesn't reach arbitration, most funeral directors will follow the decision of the FPA.
Cash paid into a funeral plan is sheltered from taxman
One bonus of a funeral plan is that once paid for, it isn't counted towards your estate, so it's excluded from inheritance tax charges when you die. If instead you'd chosen to keep money aside in a savings account to pay for your funeral, this does form part of your estate and is included in the total value of your estate for inheritance tax purposes.
The person who pays for the funeral may be able to get the money back from the estate eventually, but if you have to wait for the probate process to be completed this could take anywhere from nine to 12 months – and whether the money is released or not is not guaranteed.
There are four ways to pay for your funeral plan
Most funeral plan providers have various payment methods. If you don't have the lump sum to pay straight away, you can pay in instalments. There are four different options:
A good option and the most popular if you have the lump sum. It means you won't have to worry about ongoing monthly payments which could cost extra, or any of your family having to make repayments if you die before you've finished paying it off.
This is best option if you don't have the full lump sum but can clear the full amount within 12 months as you're not usually charged extra, so in effect you're getting to pay off your plan interest-free for a year.
But the downside is that if you die within the 12 months and haven't finished paying off the plan, your family will be asked for the remaining balance. If they don't pay, your plan could be cancelled and any money you've paid returned to your estate, minus a cancellation charge which could be as much as £800.
If you don't have the money now or can't pay in under a year, and you really want a funeral plan, you can spread your payments for up to 30 years. But the cost will be typically 10% more (though could be higher depending how long you want to spread the payments for, cancelling out any saving on the funeral plan).
If you die before repaying the full balance, your family will be asked to pay the remainder. If they don't, your plan may be cancelled for a hefty charge and any money you've already paid returned to your estate.
There may be some exceptions. Some plans such as the Co-op's pay out even if you haven't paid all the premiums if certain conditions are met so it's worth finding out. With the Co-op, if you've been paying off a two to 25 year plan for over 12 months but pass away before it's paid up, the Co-op will carry out the funeral and not charge your family the remaining instalments.
Not many of these are sold any more, but here you pay a fixed amount each month (it varies depending on your age) until you die or until your 90th birthday, whichever is sooner.
Generally your fixed monthly payments would be lower than paying by option C above, but because you could potentially be paying over a much longer time period, overall you'll likely be paying in more – unless you die earlier than expected.
WARNING! There is a real danger you could end up paying in more than the funeral will actually cost if you pay monthly until you die.
Tell your loved ones you have a funeral plan
When you die, whoever is looking after your estate will need to notify the funeral plan provider or your nominated funeral director who will arrange and pay for the funeral, so it's important you tell people you have a plan.
If you don't document it, but your family think you had a plan and just don't know who you bought it from and what the details are, the FPA has a trace a funeral plan facility on its website.
The funeral plan provider will keep a copy of everything you have requested as part of your plan, so as long as your family know who the funeral plan provider is, they don't have to track down any specific documents, but it's always a good idea to have your own copy and ensure everyone who needs to knows where it is when the time comes.
If you've set up a plan to avoid your loved ones having any nasty surprises or hassle, it's really important to tell them exactly what's included. Many don't understand plans don't cover everything.
Don't confuse funeral plans with over-50s life insurance plans
We're not a fan of over-50s life insurance plans, where for most people you end up paying in far more than you would get out. There has also been much consumer confusion following misleading promotion of them, over how much they could deliver, especially regarding funeral costs.
Funeral plans are different. That's because you can pay in one go up front, or a set amount each month for a set period of time (typically for up to five years or less) – so there don't have to be any ongoing payments for life. Also, once bought, certain basic services you want in your funeral are guaranteed to be provided. The rest, depending on the contract, may be partially paid.
Consider whether you need the money to live on now
If you need the money more desperately now, then you'll need to consider whether a funeral plan is the right option for you. Also, bluntly, your funeral will then be down to your family to arrange, so won't be your problem. If there's enough money left in your estate when you die, the funeral can be paid for from that.
Below are our top pick of providers of UK-wide funeral plans for the price. We've ranked them based on what you get as part of the plan and how likely you are to pay extra in the future. All of these providers allow you pick from a range of services but only one lets you pick the funeral director.
As each funeral plan is different and can be tailored to an individual's needs, you'll need to ensure the plan you buy is suitable for you.
All the funeral plan providers below are registered with the Funeral Planning Authority (FPA), which means they have signed up to being independently scrutinised.
The Co-op Funeralcare gives more overall price certainty than the other two providers mentioned here as it covers the essentials as standard and guarantees to cover everything in its packages against future price rises.
You must use a Co-op director. All four burial or cremation plans include:
- A funeral director to make arrangements and the hearse and funeral personnel
- Caring for the deceased and visits to private chapel of rest during working hours
- Local cremation fees or grave preparation of the grave but not plot
- Cost of ceremony and minister or officiant's fee
Check what plan's right for you. Here are the main differences (see FAQs for full breakdown):
Simple - £2,895
- Restrictions on date, simple coffin, no limo
Bronze - £3,295
- Can choose date, wood effect coffin incl maple, no limo
Silver - £3,650
- Can choose date, wood effect coffin incl rosewood, one limo
Gold - £3,899
- Can choose date, wood effect coffin incl oak, two limos
Note: Prices include £100 discount for buying online.
Choice of funeral director? No, must use Co-op.
Choice of funeral day/date? Yes, but restricted days and times on cheapest package.
Min age to take out policy: 18, or 50 for fixed monthly repayments (you have to be 80 by the time the payments end).
How to pay: Lump sum or instalments.
Cancellation charge: £250.
Yes, you can put two names against the funeral plan – it pays out for the first person to pass.
The cost of flowers, music, catering, newspaper obituaries, embalming, removing a pacemaker or artificial limbs aren't included on any plan. Read T&Cs carefully to check if anything else is not included in your chosen plan.
No, once you've bought your plan with the Co-op you won't be able to make any changes to it – though you can upgrade to a higher plan. So you'll need to be certain of what you want before you buy it.
Dignity has cut its prices by £100s, making it the lowest of the three nationwide providers. Its four set plans now range from £2,795 to £3,795 until 30 April 2019.
Dignity's plans differ from the Co-op's as there's less as standard and not future certainty on burial prices. All include:
- use of a Dignity funeral director but less choice with the Limited plan
- all cremation funerals cover the total cost of the cremation and the minister's fees.
There are important exclusions:
- For a funeral with a burial, there is an allowance of £1,220 towards the burial and minister's fees. This may be enough to cover a burial in certain parts of the country, but if you're in a more expensive area it may not be, and your family will have to pay for any extra costs. Though if you don't use it all, Dignity will refund any remaining money to your estate.
- Doctors' fees are excluded in all of Dignity's plans. They're needed for cremations and cost £164 but not if you're in Scotland, nor for burials or where the coroner's involved.
Dignity has four plans that build on the level below in flexibility on dates and times, choice of directors, pomp and ceremony, personalisation and opportunity to view the deceased.
Limited - £2,795
includes £1,220 allowance for a burial. Restricted times, limited choice of directors, special requests not permitted
Amber - £3,195
includes wood effect coffin and hearse, wide choice of dates and directors, co-ordination of flower and tributes, collection of charitable donations
Pearl - £3,550
- includes a better coffin, a limo, a procession, personalisation
Diamond - £3,795
- includes the better coffin, two limos, viewing of the deceased in the Chapel of Rest
Choice of funeral director? No. Dignity picks, though it can be local to you.
Choice of funeral day/date? Yes, but restricted days and times on Limited plan.
Min age to take out policy: 50.
How to pay: Lump sum or instalments.
Cancellation charge: £249.
You can do a dual policy at a cost of an additional £75 – it pays out for the first person to pass.
Typical things not included are the cost of embalming the body, flowers, catering, newspaper obituaries, removing a pacemaker or artificial limbs, carrying out your funeral on a weekend or bank holiday, and any doctor's or coroner's fees.
You can on all the plans apart from the Limited plan. Changes such as a change of an address won't incur any extra cost, but any changes to things such as the coffin would. Prices can be discussed when you call to make the alterations.
With Golden Charter, like Dignity and the Co-op, you can choose from four plan packages that add to the level below. Apart from the bottom priced plan, Golden Charter's packages cost slightly more than the others. They range from £2,895 to £4,099. They could also end up costing you yet more.
Although the funeral director's costs are covered, other services (such as the crematorium, burial, celebrant or minister, doctor) might not be. Golden Charter uses an allowance towards these costs. This allowance (at £800 for the cheapest plan and £1,100 for the others) is smaller than Dignity's. As cremation alone averages £750 and funeral costs have risen fast over several years, you need to think about if the allowance will be enough in your area and when the time comes. If costs exceed this allowance, the family may be asked to pay the difference.
- use of Chapel of Rest, support for the bereaved
- will writing (except for the Value plan)
- funeral director services are covered
- a varying allowance to pay specialist costs as applicable (eg. cremation, burial fees, minister or celebrant fees, doctor fees)
- choice of funeral director from list of 3,000.
Value - £2,895
- basic coffin, limited procession, funeral director chooses time and date, director's costs covered plus allowance of £800 for other specialists, costs
Standard - £3,495
- simple coffin, longer procession, no limo, will writing, third party allowance increased to £1,100
Select - £3,850
- standard coffin, one limo, can collect the deceased at anytime
Premier - £4,099
- special coffin, two limos
Choice of funeral director? Yes.
Choice of funeral day/date? Yes, but not on the Value plan.
Min age to take out policy: No minimum age.
How to pay: Lump sum or instalments.
Cancellation charge: £249.
Yes, once it's fully paid and hasn't been funded via a life assurance plan.
Check your plan carefully as each one will have different things excluded.
You can on all the plans apart from the Value plan. Changes on the other three plans won't incur a cost unless you are upgrading an item such as the coffin. This can be discussed if you call to make changes.
Local providers could be cheaper
Local providers could be cheaper. A lot depends on regional and local costs. To find a provider, it's by far the safest to start with the FPA's list of registered providers.
If you live in a more expensive area, a provider offering nationwide pricing could be cheaper.
If you move out of the area, a local provider in your original area may not cover you. Check what their limits are otherwise you could end up with unexpected costs - exactly what you'd been trying to avoid.
If you're buying in advance but you're not sure where in the country the funeral might eventually take place, you should hedge your bets with a plan that provides sufficient flexibility over location.
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Funeral Plans Q&A
First complain to the provider itself, it should be able to resolve your issue. If you aren't happy with the resolution, you can take the complaint further to the FPA if the provider is registered with it. If the complaint is for something that happens once the plan is put into action, a relative can complain, although it would normally be restricted to an executor or the relative named on the plan.
If you bought a plan with a provider that isn't registered with the FPA, then you can take your complaint further to Trading Standards or Citizens Advice.
If your complaint is about the funeral director, not the plan provider, then you can contact one of the two funeral director trade bodies, National Association of Funeral Directors (NAFD) or The National Society of Allied and Independent Funeral Directors (SAIF).
When you buy a funeral plan you'll need to tell the provider which funeral director you want it to arrange your funeral with. So if you later move house, you'll need to see if you can change funeral directors.
Many of the plan providers will allow you to chose another funeral director should you need to, but some may charge a fee to do it, or even say you can only move within 15-20 miles from the funeral director. Check the terms of your funeral plan carefully before buying.
Some of the funeral plans allow you to alter your plan at any time without any administration cost. But if you want additional features added, there may be a cost for the service itself which you will need to pay. Check the T&Cs with your plan provider before buying a plan, as many of the cheapest plan options don't allow amendments once bought.
Also if you are adding extra services, it's worth checking if the amount you have paid will increase in line with inflation. If it doesn't, there's a risk your family will have to pay extra later on.
Yes, but it just might not be the funeral you want. When you die, the executors of your estate will have access to your money to arrange your funeral. If there's not enough money in your estate to pay for the funeral and if the the person organising your funeral is on a low income, they may in some circumstances qualify to get a funeral payment from the Government to pay for it.
How much they get will vary depending on their circumstances, but the payments will usually cover the burial/cremation fee, cost of documents prepared, transport to the funeral, and up to £700 for other funeral director costs, such as the coffin and hearse. The funeral payment will need to be repaid, and it's usually taken from your estate before any debts or bills are repaid.
Alternatively, if there's no money in your estate or there's nobody to arrange one for you, your local council can arrange a 'public health funeral'. This will be a very basic funeral on a set day, though how the service will run varies from council to council.
If something is written in the deceased's will which is different to the funeral plan, even if the will was written before the funeral plan, what has been covered and paid for in the funeral plan will be executed unless the executors decide they want to go with the wishes in the will. Then it will be down to them to make the necessary changes and pay for any costs this may incur.
It depends. Some plan providers let you put two names on the plan you purchase – so it can be used for either person, whoever dies first. Other providers only allow one name on the funeral plan. If this is something you're interested in, it's best to check with the funeral plan provider.
It depends on the provider and what payment plan you've chosen. If you're paying by monthly instalments between 1-30 years, then generally you'll be given 30-60 days to make the missed payment. If you miss that, your plan will be cancelled and you'll get all your money back, minus the cancellation charge.
If you're paying by ongoing fixed monthly payments (option D in the Need to Know section 7, which we warn against doing), your plan could be cancelled and you'll receive nothing back.