Funeral plans are designed to help you meet the cost of your funeral. Find out how pre-paid funeral plans work, how much they cost – and the alternatives to a funeral plan.
What is a funeral plan?
At its simplest, a funeral plan allows you to pay upfront for your funeral so your relatives don’t have to cover the costs themselves.
Since funerals are often expensive, paying in advance can bring you some peace of mind. However, a prepaid plan isn’t the only way for you to cover the costs. Your family are allowed to pay for your funeral using money from your estate as soon as you die (and it’s not subject to inheritance tax).
Also, a funeral plan will not include everything you need for a funeral. Exactly what is covered will vary from provider to provider. This guide explains how funeral plans differ, as well as what you should consider before buying one.
Do I need a funeral plan?
When deciding whether a funeral plan is right for you, it’s important to weigh up the benefits and the risks.
| Advantages | Disadvantages |
|---|---|
| They’re protected against inflation. So even if funeral costs go up (as they have done consistently in recent years), your funeral plan won’t reflect this. | If funeral costs fall, you could end up paying more. This is possible if the Competition and Markets Authority ever chooses to implement price controls in the funeral market, which it says it is still considering as an option in the future. |
| They lock in your funeral arrangements now. This saves your family some of the stress of organising every aspect of the funeral themselves. | Your family could face unexpected costs. Funeral plans don’t cover all the costs of a funeral. If anything is left to be paid, your family will have to make up the shortfall. |
How much does a funeral plan cost?
You can buy a funeral plan from either a funeral-plan provider or directly from a funeral director.
You have the choice of either paying a lump sum or monthly instalments, usually over one to ten years. One-off payments generally range between £3,000 and £5,000.
The level of service you get depends on the plan. Providers typically offer three different types: basic, standard and comprehensive.
A comprehensive plan might include a high-quality coffin and a limousine procession. A basic plan will be cheaper, but there’ll be certain limitations on the service – for example, the date and time of the funeral may be restricted.
Many providers will also offer a direct cremation plan or a bespoke plan.
Funeral plan providers compared
Since funeral plans can differ wildly, it’s worth checking out the costs of funeral plans for a breakdown of what is covered by the major providers. Plans are ordered alphabetically.
Our table only lists providers that are members of the Funeral Planning Authority.
Each of our providers in our table cover the cost of a hearse, care of the body and arrangement and supervision of the event by a funeral director.
Basic prepaid funeral plans
The lower cost funeral plans offered by funeral plan providers will commonly offer restrictions on the services provided and which costs will be covered.
This may include lower contributions to cremation or burial costs and less choice for the date or time of the funeral.
Limousines won’t be provided for the funeral procession and there are limitations on when you can arrange a viewing of your loved one in the chapel of rest.
| Plan | ||||||||
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| Age UK – The Basic Plan
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| Age UK – The Ivy Plan
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| Avalon – Standard Plan
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| Dignity – The Limited Plan
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| Dignity – The Amber Plan
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| Golden Charter – Value Plan
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| Golden Leaves – Bronze Plan
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| Open Simple – Plus Plan
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| Plan with Grace – Tulip Plan
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| Plan with Grace – Jasmine Plan
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| Safe Hands – Pearl Plan
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| The Co-operative Funeralcare – Simple Plan
More info
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| The Co-operative Funeralcare – Bronze Plan
More info
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Standard prepaid funeral plans
Standard funeral plans will generally provide a limousine for the funeral procession or a higher contribution to the cost of the burial and cremation costs, along with the cover provided by a basic plan.
| Plan | ||||||||
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| Age UK – The Holly Plan
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| Avalon – Plus Plan
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| Dignity – The Pearl Plan
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| Golden Charter – Standard Plan
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| Golden Charter – Select Plan
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| Golden Leaves – Silver Plan
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| Open – Traditional Plan
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| Plan with Grace – Primrose Plan
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| Safe Hands – Sapphire Plan
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| The Co-operative Funeralcare – Silver Plan
More info
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Comprehensive prepaid funeral plans
The high-end funeral plans will offer two limousines and more flexibility in when you can arrange a viewing of your loved one.
They also offer the ability to make additional contributions towards special requests during the lifetime of the plan, and complimentary thank you cards at the service.
| Plan | ||||||||
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| Age UK – The Rowan Plan
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| Avalon – Premium Plan
More info
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| Dignity – The Diamond Plan
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| Golden Charter – Premier Plan
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| Golden Leaves – Gold Plan
More info
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| Golden Leaves – Platinum Plan
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| Open – Select Plan
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| Plan with Grace – Imperial Plan
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| Safe Hands – Ruby Plan
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| The Co-operative Funeralcare – Gold Plan
More info
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What costs aren’t covered?
Some considerable costs aren’t covered by funeral plans. These may include:
- Burial plots
- Flowers
- The wake
- Catering
In addition, some costs may not be met fully, and your family may have to pay the rest. For example, many providers only contribute towards the cost of cremation or burial.
Age Concern and Dignity guarantee the price of cremation, but only pay a contribution towards burial costs. Golden Leaves, on the other hand, has a set contribution to burial or cremation costs.
The Co-operative guarantee to cover all costs for a burial or a cremation in their Silver and Gold plans. However, the cost of a burial plot is not included.
As always, check the details to make sure you know exactly what you are buying.
What happens if I die before the plan is paid?
If you choose to pay in instalments, there’s a risk you’ll die before the plan is fully paid. In the event that this happens, your family will need to make up the shortfall.
Some providers – the Co-operative, Avalon and Dignity – underwrite their plans so that, if you die before you’ve finished paying for it, they’ll cover the cost.
Is my money safe in a funeral plan?
To safeguard your plan, your provider will either place it in a trust fund or invest it in an insurance policy that pays out when you die. The Financial Conduct Authority (FCA) has rules to protect your money in both instances.
You may also be protected under Section 75 of the Consumer Credit Act 1974. Under the Act, a credit card provider must protect purchases over £100 if there is a problem with good and services you have paid for, or if the company you are buying from goes bust.
If you are paying for your funeral plan in total upfront, you can benefit from Section 75 protection by putting part of the bill on your credit card.
If you want to pay by monthly instalments you can also gain protection by using the a credit card to pay any deposits or asking your provider to pay part of the bill upfront using the card.
Are funeral plans regulated?
The funeral plan market is set to come under the FCA’s remit in July 2022.
Until then, providers aren’t regulated. This means your money isn’t protected under the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 in the event of a bank or building society going bust. You also can’t escalate a complaint about a funeral plan provider to the Financial Ombudsman Service.
However, there is a professional body for providers called the Funeral Planning Authority (FPA), which has a code of conduct that all of its members must comply with.
As part of the code, the FPA’s members and the FPA itself pledge that if a provider goes bust they will look into paying for funerals that are covered by funeral plans.
We would recommend, if you do decide to buy a funeral plan, that you always go with an FPA-registered provider. You can find the registered providers listed on the FPA’s website.
What are the alternatives to a funeral plan?
A funeral plan is one way of ensuring your family doesn’t have to shell out thousands of pounds after you’re gone. But what are the alternatives?
Over-50s life insurance
An over-50s insurance plan pays out a fixed lump sum to your family when you die, but these plans do have some drawbacks.
The payout does not increase with inflation, meaning that you could end up paying more in premiums than you can claim.
For example, buying a £10-a-month policy with Aviva at age 50 would pay out £2,767 but, by the age of 73, you would have already have paid this much in premiums.
However, the product is offered without medical screening, making it potentially useful for those who can’t afford standard life insurance because of medical conditions.
Savings accounts
A savings account has the advantage of growing your money with interest. However, the rising cost of funerals would mean that you may not earn enough interest to keep up with the surge.
According to Sunlife, the average funeral costs increased by 1.7% in 2020 – less than in previous years, but still above the interest rates offered by the vast majority of savings accounts.
To make sure that relatives can access the savings after your death, set the account up in a joint name with a trusted family member.
Paying from your estate
Funeral costs can also be paid from your estate after you die. Banks will normally release funds if they’re presented with an itemised bill from a funeral director and a copy of the death certificate.
Buying a funeral plan: a step-by-step guide
If funeral plans are for you, following our tips will help you make sure you get the right one to suit your needs.
1. Consider how your family would cope financially when you die
Funeral plans are designed to help meet the cost of the funeral when you’re gone, so think carefully about your family’s finances. If your estate could cover the cost of a funeral, even with the likely increases, or your family has the money, a basic plan – or even no plan at all – might be the best option.
2. Find a number of policies quickly by using a comparison site
A comparison site is a good way of taking the legwork out of finding a number of suitable plans. Over 50s Choices and FuneralPlanMarket.com, for example, compare many of the big providers, so are a good starting point. Remember, however, that funeral plans can be complex so you should examine the policy carefully and phone the provider if you are unsure about any of the details.
Warning on funeral plan comparison sites
3. Pay for your policy as quickly as you can
Like many other financial products, such as car and home insurance, funeral plan providers give you the option of paying either in instalments or in a lump sum.
Most providers give you the option to pay over 12 months to 120 months. Paying in instalments for a long time will cost more because of administration fees and interest.
While 12 monthly payments may cost roughly the same, paying over 60 months, for example, can add around 15%-26% to the overall cost.
4. Read your documents carefully
While funeral plans cover much of the cost of funerals, there are many items that are exclude, such as headstones and burial plots. Some costs are also capped, such as burial and cremation costs.
Read the documents carefully to make sure you understand the plan fully – as well as its limitations – before you buy.
5. Tell your loved ones
If, after you die, your plan goes unclaimed, then the funeral plan provider could repatriate the money.
Make sure your family know you’ve bought one, and who with, to save them the trouble of hunting down your funeral plan.
