Funeral Plans in the UK

funeral insurance

The style, content and format of a funeral is something that tends to raise strong emotions, especially if you are thinking about your own. Many people have very firm ideas about how the whole ceremony needs go and how much money might be spent on making that happen.

In response to wishes just such as these, pre-paid funeral plans offer you the chance to sit down well in advance and devise exactly the form of ceremony you want. The ability to pay for those arrangements in advance, makes certain that the wherewithal is there to pay for their realisation – without your having to worry about any financial burden resting on the shoulders of the family and loved ones you leave behind.

How do they work?

The principle is really very simple and straight forward, allowing you to plan every last detail of your funeral, including the choice of your own local funeral director and the price you wish to pay for those arrangements.

Although you pay over the money in advance, it is kept safe and secure, with every prospect of the amount you have paid keeping pace with inflation and the steadily rising costs of funerals.

This is achieved either by placing the funds you have paid into a properly regulated trust fund or invested in a whole of life insurance policy on your behalf.

Funeral plans in the UK are not a new idea – many of the friendly societies of the nineteenth century flourished precisely from that need to save up for a decent funeral service. What is new, however, is the way such plans are regulated and the financial products which are available to protect the value of the money you have paid in advance.

How safe is my money?

Many funeral directors offer their own prepaid funeral plans, which – on the face of it – seem to provide just the same type of service.

A significant difference with the a plan arranged by your local firm of undertakers (as opposed to a national plan), however, is that your funds may not be protected if the firm puts your money in to their own business bank account; goes out of business in the interim; or that the money you pay now is sufficient to cover the costs of the service you want when the time finally comes.

Since 2002, all trust funds (which is where national providers’ funeral plans are typically invested) are closely regulated in accordance with the Financial Services & Markets Act 2000 (Regulated Activities) Order 2001.

The purpose of the regulations is specifically geared towards protecting customers’ money, so that the funds paid in advance retain their value for the purpose of covering the funeral costs you planned in advance. Arrangements for the safeguarding of your money in a trust fund or through a whole of life insurance policy are regulated by the Financial Conduct Authority (FCA).

Furthermore, providers of prepaid funeral plans in the UK also have the benefit of agreed codes of conduct and practice established by the self-regulatory body, the Funeral Planning Authority (FPA). The FPA ensures that its members abide by the established code of conduct – which is designed to safeguard the interests of the consumer.

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