Prepaid funeral plans

With thanks to Simon Cox of Funeral Solution Expert for his contribution to this guide.

What is a prepaid funeral plan?

A prepaid funeral plan allows you to pay for the essential elements of a funeral in advance, either for yourself or someone else. Plans typically cover many (though not all) of the costs associated with a funeral, such as a coffin, funeral director, the cremation, and collection and delivery of your body.

Having a prepaid plan in place means those close to you will have less to organise when you die and less (sometimes nothing) to pay towards your funeral – a real boon for many. 

The types of prepaid funeral plans you can get generally fall into three categories: 

1. Burial funerals. A funeral service with mourners where you are buried.

2. Cremation funerals. A funeral service with mourners where you are cremated.

3. Direct cremation funerals. A funeral service with no mourners where you are cremated.

Plans can usually be taken out by anyone aged over 18, though some providers say you need to be at least 50. If you want to pay for a plan with monthly instalments there might be an upper age limit (often around 80), after which you'd need to pay upfront. The average age of somebody who purchases a funeral plan is 73, according to Co-op Funeralcare.

Around 183,000 people bought a prepaid funeral plan in 2024, with a total of 1.75 million funeral plans in place across the UK, according to the National Association of Funeral Plan Providers. But don't rush into buying one before reading this guide, as they aren't suitable for everyone.

Prepaid funeral plans: the six need-to-knows

Funeral plans can ease the financial and emotional burden on your family at a distressing time, but they won't be for everyone. Here's what you need to know...

1. You pay today's price for a funeral plan, even if funerals are more expensive when you die

   

   If funeral costs rise in future, your funeral plan is protected against inflation.

   For example, say you buy a funeral plan costing £3,000 today but don't die for another 15 years. If in that time the cost of everything goes up (which is likely) and the same funeral now costs £5,000, your loved ones won't be asked to pay the £2,000 difference.

   However, some costs are considered to be from a third party (such as cremation fees). If these have risen and aren't covered in full by your plan, your loved ones might be required to make up the difference. They might have to cover even more depending on what other guarantees were or weren't in the funeral plan contract –  so you need to check carefully what's included before taking out a plan. 

   An alternative to paying for your funeral in advance is setting aside cash for it in a savings account and letting your family know what you want it to be used for.

   But they'd have to make all the arrangements themselves and could still find there's not enough money to cover the full cost. Plus, your family may not be able to access the money in time to pay the funeral bills as they may have to wait for the legal process to be sorted, such as the grant of probate.

   An advantage of a funeral plan is that once paid for, it isn't counted towards your estate, so it would have no effect on how much inheritance tax you'd need to pay (if any). That's unlike money in a savings account, which does form part of your estate. Read our inheritance tax guide for more info.

   Having savings could also affect your assessment for care homes and/or benefits, such as universal credit, pension credit or housing support.

   Another bonus of buying a plan is your council might not count it if you're assessed for help towards care costs. Councils look at your savings, income and assets to work out how much you need to pay towards your residential care. Check what savings limits your council sets, as there are different thresholds within the UK.

   Is it better just to put aside money for my funeral in a savings account?

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2. It's cheapest if you pay for your plan upfront or over 12 months (if interest-free)

   Most funeral plan providers have various payment options. There are typically four:

   1. Pay a lump sum. If you can afford to do this, it's probably your best bet. That's because you're only paying for what the plan actually costs; the provider would pay for your funeral if you died tomorrow; and your money is protected.

   2. Pay over 12 months. This is the next-best option if you don't have all the money up front, but can afford to clear the full amount within 12 months. There's usually not a charge to do this, so in effect you can pay off your plan interest-free for a year. Many plan providers ask for a small deposit (usually less than £100) when setting up a monthly instalment plan but this will be deducted from the total you owe – it's not an extra charge.
      

      The only difference to paying in full upfront is that if you die within the 12 months and haven't finished paying for the plan, the provider will refund your loved ones what you've paid, rather than provide the funeral. So this means your family will have to organise the funeral – plus they might be out of pocket if costs have risen since you took out the plan.

   3. Be careful. Spread the cost over up to 25 years. If you don't have the money upfront and can't afford to spread the cost over a year, you can choose to spread your payments over a longer period of up to 25 years (depending on the provider). You can usually only do this up to the age of around 80 – so if you're 75, the maximum length you'd likely be able to spread the cost over is five years.
      
      But paying a plan off over multiple years isn't a good option for many as you're usually charged interest or fees, so you'll likely end up paying more than the funeral's worth. The only exception is if you die just over two years after taking out your plan (or one in some cases), in which case the provider must still pay for your funeral, even if you haven't paid off the plan.

   4. AVOID. Fixed monthly instalments until you reach 90 or die. Not technically a funeral plan, this type of payment structure is essentially an over-50s life insurance model (which we're not a fan of). Here you pay a fixed amount each month (it varies depending on your age) until you die or your 90th birthday, whichever's sooner.
      
      Generally, your fixed monthly payments would be lower than paying by the 'up to 25-year' option above, but because you could potentially be paying over a much longer period, overall you'll likely pay much more than the funeral's worth – unless you die earlier than expected. What's more, with these types of payment plan if you cancel you're unlikely to get any money back whatsoever.
      
      Be wary that over-50s life insurance models are sometimes subtly paraded as funeral plans, even though they're not. If a 'funeral plan' has a whiff of an over-50s payment model, it's best to avoid.

3. A prepaid funeral plan WON'T cover the costs of a burial plot, headstone and more – which can amount to £1,000s extra for your loved ones

   Many providers will let you choose between a cremation or burial funeral plan – and a number also offer direct (unattended) cremations.

   But watch out for any costs that may not be included. For example, the biggest cost unlikely to be covered by a prepaid burial funeral plan is a burial plot and headstone, which can easily set back your loved ones £1,000s extra (sometimes even £10,000+) when you pass away.

   Burial funerals typically cost a lot more than cremation services, so the level of burial fees a plan will pay is often capped. So if you do choose to buy a funeral plan and want to be buried, your family will likely need to put a significant amount of extra money towards a burial when you die. 

   Cremation and direct cremation fees can be capped too, depending on the provider or plan type.

   So before you buy a plan, it's VITAL to understand what is and isn't included and make sure you budget for any extras. And unless you're really on a budget, if you want a funeral that allows mourners then it's best to avoid the very basic plans, as these are usually much more restrictive about the days that your funeral can be held.

   Usually included in a prepaid funeral plan:

   • Transport of the body to the funeral director's location

   • Care of the body

   • Visiting the body in the chapel of rest

   • A coffin, hearse and funeral director personnel

   • An allowance towards burial/cremation costs

   • Delivery of ashes (not always included, so do check) 

   Sometimes included in a prepaid funeral plan (depending on the plan):

   • A guarantee that crematorium fees will be covered (not capped)

   • Minister's or celebrant's fees

   • Limousines for mourners

   Not usually included in a prepaid funeral plan:

   • Burial plot (£500 to £3,500)

   • Any extra cremation fees (up to £1,000)

   • Headstone/memorial (£1,000 to £3,000)

   • Extra large coffins

   • Funeral notices

   • Order sheets

   • Embalming (£150+)

   • Flowers, catering and other costs for a wake (£250+)

4. Prepaid funeral plans are protected, so your money's safe

   The Financial Conduct Authority (FCA) regulates firms that provide and arrange prepaid funeral plans. This means:

   1. Your money's safe with an authorised provider. As you'll either get a funeral or you'll get a refund – even if the provider goes bust. That's because funerals paid for in instalments must go ahead even if you die before paying the final instalment. The only exception is if you die within 24 months of purchasing the plan, in which case the provider won't be required to pay for your funeral but must give a full refund.
      
      There are some funeral plan providers, including Co-op and Dignity, which will pay out for a funeral if you die within two years of taking out your plan, as long as you've paid at least the first 12 months of instalments and your payments are up to date. Golden Leaves, another provider, even pays out if you die after making just one or two instalments.

   2. You're protected by the Financial Services Compensation Scheme (FSCS) should your plan provider fail. The FSCS can either ensure your funeral contract is carried out as planned, or pay cash compensation.

   3. If you have a complaint against a funeral plan provider or intermediary, you can refer it to the Financial Ombudsman Service. Escalating a dispute to the ombudsman is free for you to do.

   • All providers need to be FCA-authorised or they'll be shut down. The FCA will carry out checks on authorised firms to ensure they are sticking to the rules.

   • You've got 30 days after buying a plan to cancel penalty-free if you change your mind.

   • You'll get a partial refund if you choose to downgrade your plan.

   • Cold-calling is banned and advertising standards are in place to ensure plans are sold fairly.

   • Third parties, such as funeral directors, aren't allowed to receive commission for selling a funeral plan.

   • All funeral directors have to display a standardised price list.

   Other ways you're protected by FCA regulations

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5. If you move home, contact your plan provider to see if you can change to a closer funeral director

   When you buy a funeral plan, you'll need to tell the provider which funeral director you want to take care of the arrangements. 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. 

   Changing funeral director will also depend on whether your plan provider works with directors in the area you're moving to. The areas covered vary by provider, so it's worth checking this in any plan you're considering. 

   Plans typically specify how far a funeral director will go to collect a body. The mileage limit can vary, but what counts is whether there's a funeral director willing to take on your plan. Golden Charter, for example, works with a large number of directors, so its collection mileage is limited to 25, whereas Co-op directors will go up to 50 miles. Some, such as With Grace, have no limit on the number of miles they'll travel.

   If your plan provider doesn't work with any directors in the area you're moving to, you'll be faced with having to cancel your plan – something which'll leave you out of pocket if it won't refund you in full without subtracting a cancellation fee.

   Another important reason to inform your provider if you later move home is so you continue to receive correspondence from your provider. This will make it easier for friends/family to track down your provider after you've died.

   Quick question:

   A prepaid funeral plan could be good if you live in, or are moving to, an expensive area. 
   

   Some large funeral plan providers have priced their packages, particularly for cremations, to work across big swathes of the UK. So, if you're in a location where funerals are pricey, you could make a saving by buying a plan from a national company.
   

   Similarly, if a funeral's in a less expensive area, you could lose out with a funeral plan because burial and cremation costs behave in a similar way to property: they're all about location, location, location. So, if your funeral's going to take place in a less expensive area, you may find it cheaper to go with a local provider, rather than a company with a national pricing strategy.

   Is the price of a plan affected by where I live?

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   Need help tracing a lost or forgotten funeral plan? Each week, the National Association of Funeral Plan Providers hears from dozens of families trying to trace a loved one's funeral plan or provider. See below for help finding a lost or forgotten funeral plan.

6. You can save on burial plot costs if you share a family plot or opt for a woodland burial

   

   Burial costs can vary dramatically. 

   Buying a burial plot can cost just a few hundred pounds in remote rural locations. But in cities it can be £1,000s, and over £10,000 in some parts of London. This variation puts burial costs outside plans – although some will permit any spare allowance to go towards the cost of a plot.

   Despite hikes in crematorium fees, cremations where you choose not to bury the ashes usually work out cheaper than burials because you don't have the same associated costs of buying a plot and paying towards site maintenance. And it's worth noting, you don't actually own a burial plot, it's more of a lease, usually up to 100 years. Then it'll need to be renewed – for a fee. 

   You can cut burial costs by £100s or £1,000s

   • If you don't need to buy a plot because you've already got one, or are prepared to buy one to share, there will then only be £100s to pay for opening a grave. In some circumstances, total costs could work out less than cremations.

   • You could choose a plot in a cheaper location. Even though some councils charge £100s more for non-residents, it could still work out cheaper.

   • A natural burial or woodland site will be cheaper than a council-owned site, but you'll need to ensure materials used are biodegradable.

   • A standard coffin sourced via an undertaker can cost about £350, but you may be able to source a biodegradable one for around £200.

   • If you are a member of a mosque or a synagogue, there may be special arrangements.

Is it worth paying for a funeral plan?

Below we've highlighted when it might – and might not – make sense to buy a prepaid plan.

Of course, the big unknown is when you'll end up needing to use it. But that isn't a reason not to buy one. If you've paid off a plan in full, you know it's there when you need it. While if you die before you've paid off your plan, you'll either get all your money back, or you'll get the funeral you were paying towards, depending on how soon you die after taking the plan out.

How the cost of funeral plans compares to paying direct

It's possible to find a funeral that costs less than a similar plan – in particular, direct cremations can cost considerably less at the point of need than they do as part of a plan. So if you think your family will be cool-headed enough to shop around and not succumb to upselling after a loved one has passed away, you may not need to buy a plan.

Be mindful that the cost of funeral plans can vary depending on where you live, and you'll likely pay more if you opt for a burial over a cremation. 

Have a look at funeral prices in your local area and compare that to a few different prepaid plans to get an idea of whether they offer good value for money. But don't underestimate how much it'll be worth to your family to know plans are already in place when you die.

How to buy a funeral plan

Before you start thinking about which provider to go with, you need to think about what sort of funeral you want and the level of plan you want to take out.

The two key things to consider first are whether you want mourners at your funeral (if not, you might be limited to a direct cremation plan) and whether you want to be buried or cremated, both of which can have a significant impact on cost.

If you live in an expensive area (or just aren't sure how much a burial or cremation might cost where you live), look for a plan that guarantees the full cost of your burial or cremation will be covered. If you opt for a plan that has a maximum spend limit, your family may end up having to foot the bill if the full cost of your burial or cremation isn't covered.

You then need to decide what else is important to you – how long you pay the plan off over, whether you want a specific funeral director or a particular style of coffin, if mourners' limos are important to you, for example. These will all play a part in narrowing down your options.

Here are some key differences between common plan levels:

• A direct (unattended) cremation plan usually costs around £1,500. But there'll be NO mourners at your funeral if you opt for one of these, plus prepaid plans tend to work out more expensive than paying for a direct cremation at the time of need. Plans typically include collection of the deceased, cremation fees, and a simple coffin. There are some which cost nearer to £1,000, but you should check carefully what's actually included in these.

• A basic cremation/burial with mourners can cost anywhere between £2,000 and £3,500 and usually covers transporting and caring for the body, plus disbursements towards officiate fees and the cremation or burial costs. But cheaper plans often mean you're restricted on the time and day of the funeral service and you won't get a mourners' limousine. The coffin is likely to be very basic.

• A standard cremation/burial with mourners usually costs between £3,000 and £4,000 and gets you a choice of times and day of the week for the funeral, and a generally a better quality coffin, such as a wood effect coffin. You might get one mourners' limousine with some standard plans.

• A higher-level cremation/burial with mourners is likely to cost more than £4,000 and will include everything from the basic and standard packages, and usually includes at least one (if not two) limousines for mourners to travel in. You can also expect to have a higher-quality coffin, often wood veneer or sometimes even solid wood.

Which plan provider and package should you choose?

Once you've thought about how much you want to spend and what sort of funeral you'd like, you can start comparing plans. But with so many providers and packages available to choose from, knowing where to start can be a challenge. 

So, we've reviewed the FCA-authorised providers and highlighted three you may want to consider if you're after a burial funeral, two to bear in mind if you want a cremation, and two to think about if you're contemplating a direct cremation.

However, do bear in mind:

• We've focused on nationwide providers that work with a large number of funeral directors. 

• All providers featured guarantee that the full cost of your burial/cremation will be covered.

• The best plan/provider for you will depend on your location, budget and preferences, so always read the documentation to understand exactly what is and isn't included.

• This is meant as an overview of the plans on offer. As the services will be provided by different funeral directors, we haven't been able to take customer service into account here.

Also be mindful of plans which come with expensive cancellation fees (£250+ can be considered hefty). If you shop around you'll see there are providers out there which don't charge cancellation fees, some of which feature below.

'Green' funeral plan options are very limited right now

If you're looking for an environmentally-friendly funeral plan, your choice is currently very limited as not many providers appear to offer such an option.

The slight exception is Distinct Cremations, which makes a donation to the World Land Trust for every funeral plan bought through it. Other than that, a few other providers offer more environmentally-friendly coffins, as well as eco urns for your ashes.

What are the alternatives to a prepaid funeral plan?

Prepaid funeral plans Q&A