Thinking about your own funeral can be hard. But many people choose to plan ahead, not just for themselves, but to ease the burden on their loved ones. A prepaid funeral plan can give you peace of mind, knowing that when the time comes, the costs are covered and your wishes are known.
It’s natural to want reassurance before you make a decision like this. You might be wondering: Is my money safe? Will the plan still be valid in the years ahead? What if the provider goes out of business?
In this article, we’ll explain how prepaid funeral plans work, how they’re regulated, and how to choose a plan that feels safe and right for you.
What is a prepaid funeral plan?
A prepaid funeral plan is a way of arranging and paying for your funeral in advance. Rather than leaving your loved ones to organise everything at a difficult time, you can choose the type of funeral you want and pay for it now, either in a single payment or in monthly instalments.
Funeral plans usually cover the key services provided by a funeral director, such as collecting the person who has died, caring for them, and carrying out the cremation or burial. Some also include third-party costs like doctor’s fees or minister’s fees, although these vary by provider.
There are plans available for all kinds of funerals, from simple direct cremations without a ceremony, to more traditional services with family and friends in attendance. What they all have in common is that they give you more control over what happens and how much it costs.
How do funeral plans work?
When you buy a funeral plan, you’re entering into an agreement with a provider who promises to carry out a funeral according to your wishes. You choose the type of funeral you want, pay for it up front or in instalments, and the provider guarantees to deliver the services when the time comes.
Enough money to provide your funeral in the future is then held in a trust or used to buy a whole-of-life insurance policy, until it’s needed to pay for the funeral. When the time comes, your loved ones contact the provider, and everything is arranged in line with the plan.
Some funeral plans allow you to personalise the details, such as choosing music or readings. Others are simpler, with fewer decisions to make. The right plan depends on what matters most to you.
The biggest advantage? Your family doesn’t have to guess what you would have wanted, and they’re not left to worry about the cost.
Are funeral plans regulated?
Yes. As of 29 July 2022, all providers of prepaid funeral plans in the UK must be authorised and regulated by the Financial Conduct Authority (FCA). This means that any company selling or administering a funeral plan must meet strict rules designed to protect customers. These rules cover everything from how your money is held, to the way plans are sold, and what happens if your provider goes out of business. The aim is to give people peace of mind that the funeral they've paid for will be delivered when the time comes.
Before this regulation came into force, the industry was self-regulated through voluntary organisations such as the Funeral Planning Authority (FPA). Now, with FCA regulation in place, customers have even stronger protection.
What protections does the FCA offer?
The Financial Conduct Authority is an independent body that oversees financial services in the UK. Its job is to make sure consumers are treated fairly and their money is kept safe.
When it comes to funeral plans, FCA regulation offers several key protections:
Approved providers only: Only companies that meet the FCA’s standards can offer funeral plans. This includes demonstrating financial stability, clear communication with customers, and robust complaint handling.
Your money is ring-fenced: Enough money to provide your funeral in the future must be securely held in a trust fund or used to purchase a whole-of-life insurance policy. Either way, this ring-fences your money until it’s needed to pay for the funeral.
Protection if something goes wrong: If your provider goes out of business, being FCA regulated means funeral plan providers have the protection of the Financial Services Compensation Scheme (FSCS), which has measures in place to protect your plan. This could include transferring your plan (using the ring-fenced money) to another funeral plan provider or offering a refund if that’s not possible.
The right to complain: If you have a problem with a funeral plan provider, and they don’t resolve it to your satisfaction, you can escalate the complaint to the Financial Ombudsman Service—an independent body that settles disputes.
A 30-day cooling-off period: You have the right to cancel a plan within 30 days of purchase and receive a full refund, giving you time to change your mind without financial loss. If you pay by instalments, you can cancel your plan for up to 24 months (or until your plan is paid in full if earlier).
Is a funeral plan the same as life insurance?
Not exactly. While funeral plans and life insurance can both help with funeral costs, they work very differently.
A funeral plan is a contract that guarantees the delivery of specific services when the time comes, often at today’s prices. It’s designed to cover the funeral director’s costs in full, regardless of inflation.
With life insurance, you pay premiums and your family receives a cash sum when you die. That money can then be used for any purpose, including a funeral, but it might not be enough if funeral costs have risen, or if premiums haven’t been paid in full.
In other words, a funeral plan focuses on services; life insurance focuses on money. Some people choose to have both, depending on their needs.
What happens if I die before my funeral plan is paid?
This is a very common concern, especially for people who choose to spread the cost of their plan over several years.
What happens next depends on the terms of your specific plan:
- With some providers, the funeral will still go ahead as planned if you've made a certain number of payments, even if the balance isn’t fully paid.
- Others may require the full balance to be settled by your estate or family before the funeral can take place.
- Some plans offer additional protection after a set period (often 12 or 24 months), where the remaining payments are waived in the event of your death.
It’s important to read the terms and conditions carefully so you know what’s covered.
How do I check if a funeral plan provider is authorised?
Before you buy a funeral plan, it’s essential to check that the provider is authorised by the Financial Conduct Authority. You can do this by visiting the FCA Register online and searching for the company’s name.
If a provider is not listed, they are not legally allowed to sell or administer funeral plans. Avoid buying from any company that doesn’t appear on the register.
What happens if my provider goes out of business?
This is a common worry and one of the main reasons the industry is now regulated.
If your provider goes out of business, being FCA regulated means funeral plan providers have the protection of the Financial Services Compensation Scheme (FSCS), which has measures in place to protect your plan. This could include transferring your plan (using the ring-fenced money) to another funeral plan provider or offering a refund if that’s not possible.
So, while no company is immune to financial difficulties, the regulatory framework is designed to make sure you’re not left without support.
How are funeral plan payments protected?
When you buy a funeral plan, enough money to provide your funeral in the future is either:
- Placed into a secure trust fund, managed by independent trustees, or
- Used to take out a whole-of-life insurance policy with a UK-based insurer
Both methods are designed to protect your money and ensure it’s available to pay for your funeral, whenever that might be.
What are the benefits of a prepaid funeral plan?
A funeral plan offers more than just financial protection. It gives peace of mind, both to you and your loved ones.
Some key benefits include:
- Locking in the costs: Many plans make funeral director costs inflation-proof, meaning you can pay at today’s rates, protecting against future price increases.
- Reducing stress: Your family won’t have to make difficult decisions or worry about payments during an emotional time.
- Tailoring your wishes: You can specify the kind of funeral you want, whether that’s a simple direct cremation or a more traditional service.
- Clarity and control: You know everything’s taken care of, on your terms.
But these benefits only hold true if the plan itself is secure. That’s why regulation matters so much.
What costs does a funeral plan cover?
A prepaid funeral plan is designed to protect you and your loved ones from rising funeral costs—and from the emotional strain of organising everything during a difficult time. But not all plans are the same, so it’s important to understand what’s covered before you buy.
Most funeral plans will cover the essential services needed to carry out your chosen type of funeral. This can include:
- Collection and care of the person who has died: This includes bringing them into care and looking after them with dignity until the funeral takes place.
- Funeral director’s services: For organising the funeral arrangements.
- Cremation or burial fees: Depending on the plan, this may include the cost of the cremation itself or a contribution towards burial.
- Transport: This might include a hearse or private ambulance to take the person to the crematorium or cemetery.
- A simple coffin: Most plans will include a coffin that is suitable for either burial or cremation.
Always check the small print before you buy. A reputable provider will make it clear what is and isn’t covered, so there are no surprises later. It’s also wise to ask whether the plan is guaranteed to cover all these costs in the future, even if prices rise—some plans only provide a contribution, rather than full cover.
With Pure Cremation, there are no hidden extras. We offer a fully inclusive direct cremation plan, so your loved ones won’t be asked to pay anything more at the time of need.
If you're choosing a Pure Cremation funeral plan, the focus is on providing a respectful, unattended cremation without a formal service at the crematorium. That means your plan will include:
- Collection from anywhere in mainland England, Wales, and Scotland, day or night, by our private ambulance team
- Professional care of the person who has died
- Completion of all legal paperwork
- A simple, dignified pine coffin
- Cremation fees
- Hand delivery of the ashes to any mainland address in England, Wales and Scotland
Choosing a funeral plan you can trust
Not all funeral plans are the same. Here’s what to look for when choosing a provider:
- FCA-authorised: Check the FCA register to ensure the provider is legally allowed to sell funeral plans.
- Transparent pricing: Look for clear explanations of what’s included and what’s not.
- No hidden fees: Make sure there are no surprise costs for your family later on.
- Good reputation: Check customer reviews and testimonials.
- Dedicated customer care: Are they available to answer your questions and support your loved ones when needed?
A prepaid funeral plan can be one of the most caring decisions you make. It shows your family that you’ve thought ahead, taken responsibility, and want to make things easier for them.
Pure Cremation Funeral Planning Limited is authorised and regulated by the Financial Conduct Authority and is proud to be so, with a straightforward, affordable plan that keeps things simple for families. We take pride in offering a service that includes everything you need for a direct cremation. From the moment you first get in touch to the return of the ashes, we provide totally seamless care. Our plans are designed to be straightforward and transparent, with no hidden extras.
We’ve helped thousands of people take care of their future with dignity and confidence, and if you’re interested in learning more about our funeral plan, we’re here to answer any questions you might have.
