What is a funeral plan?
A funeral plan enables you to pay in advance for some or all of your funeral, at today’s prices. Funeral plans can be purchased from funeral directors or funeral plan providers such as Funerals with Grace.
Most funeral plans cover the cost of a coffin and funeral, collection of the person who has died, and disposal of the ashes as per your wishes. Some also offer specialist telephone support and help with practical issues such as certification and registration.
What are the advantages of a funeral plan?
There are several advantages to a funeral plan:
- The funeral is pre-paid at today’s prices. Not only is your funeral paid for, but costs will not increase due to inflation.
- A specific funeral service and package can be planned in advance, reducing the stress of decision-making for the bereaved family.
- A funeral plan is not part of your estate. The funds are held in a trust and are not considered part of your estate for inheritance tax.
Are there any drawbacks to a funeral plan?
The advantages of a funeral plan outweigh the potential drawbacks, which include:
- The money in the funeral plan can only be used to pay for funeral costs, and the plan is generally fixed, with limited options for changes or upgrades.
- If you were to die soon after purchasing your funeral plan, it may turn out that you paid more for it than the funeral actually costs, as there is an element of “future-proofing” built into the cost.
Is it safe to buy a funeral plan?
Yes, as long as it is provided by a trustworthy company such as Funerals with Grace. Prepaid funeral plans are governed by a mix of financial regulations, consumer protection laws, and industry-specific rules to ensure transparency, financial safeguarding, and ethical conduct for consumers. In the UK, prepaid funeral plans are mainly regulated by the Financial Conduct Authority (FCA), which oversees the financial services sector.
Financial regulation
- Money deposited into a plan after July 2022 is protected under the Financial Services Compensation Scheme (FSCS) guaranteeing the placeholder is protected for a value of up to £85,000 should their provider go into administration.
Consumer protection laws
- UK consumer protection laws play a vital role in safeguarding individuals who purchase prepaid funeral plans, ensuring transparency, fairness, and recourse in case of disputes.
Funeral industry regulation
- In the UK many prepaid funeral plan providers, like Funerals With Grace, join the Funeral Planning Authority (FPA) a regulatory body which sets out a clear code of practice to protect its consumers.
- The funeral industry is also regulated by the Competition and Markets Authority (CMA).
Legal frameworks
- In the UK, prepaid funeral plans operate within various legal frameworks that govern contracts, trusts, and financial services. These legal frameworks provide guidelines for the establishment, management, and enforcement of prepaid funeral plans across the UK
To find out more, explore our guide on How prepaid funeral plans work.
Can you cancel a funeral plan and get your money back?
Many funeral plans offer a cooling-off or cancellation period – usually 30 days – during which you can receive a full refund.
Funerals with Grace also offer an extended cancellation period of 24 months if you are paying in instalments of 24 months or more.
After the cancellation period there is likely to be a cancellation fee if you want to cancel your policy. This is to cover the administration involved in cancelling the policy and refunding your money.
What if I die before I have finished paying for my funeral plan?
Many funeral plan providers offer the facility to pay in instalments. Depending on the funeral plan, the provider may not be obliged to provide a funeral if it sadly needs to take place before those instalments are all paid. It’s important to read the small print when taking out a funeral plan.
With Funerals with Grace if you choose to pay for your funeral plan over two or more years, you’ll be covered for the full cost of your funeral after 24 months of payments, even if your plan is not fully paid. As long as you have paid 24 instalments and your payments are up to date, we will still provide all the services included in your plan.
Who offers the best funeral plans?
When choosing a funeral plan, financial expert Martin Lewis recommends prioritising FCA-regulated funeral plans. Also look for strong customer reviews and transparency about terms and conditions.
Funeral plan providers can also vary quite dramatically in costs. For example, if you compare the costs of a funeral plan with Funerals with Grace with other providers such as The Co-op, Golden Charter and Pure Cremation you will find them to be significantly cheaper.
What happens if your funeral plan provider goes bust?
Unfortunately this does sometimes happen. Notable funeral plan collapses in recent years include Safe Hands and One Life.
This is why it’s important to always choose an FCA-regulated funeral plan provider, as you may then be protected by the Financial Services Compensation Scheme (FSCS). Always check the FCA website for funeral plan warnings and current updates on regulated providers.
Another way to save for a funeral is to take out some kind of funeral insurance. For information and answers to questions about funeral insurance, see our article Funeral Insurance – Your Questions Answered
For further support and guidance with any aspect of funeral care and planning, remember that With Grace is always here to help.
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