Funeral Plans Explained: How do they work & Is my money safe?

16 February 2023

Funeral plans are a great way of making sure that you get the funeral you want at a price you can afford while helping those close to you to make decisions at what is a difficult time.

According to a 2016 study, only 6% of UK adults have a pre-paid funeral plan, compared to 70% in the Netherlands. Very few people under 55 have arranged a plan – just 2% of adults.

How do they work, and how do funeral plan providers make sure your money’s safe?

  • What is a funeral plan?

 Funeral plans are now available from many funeral directors. You pay into a fund upfront, or monthly, to cover the costs of your chosen funeral in the future. A prepaid plan means that your relatives don’t need to find money, later on, to pay for your funeral and, as well as creating the funeral you want, you can fix the costs of your funeral to protect against rising prices.

  • I’ve heard about companies going bust. Will my money be safe?

Funeral plans are now regulated by the Financial Conduct Authority, protecting consumers who choose to pay into plans. The FCA has authorised 26 of the main funeral plan providers. We strongly recommend that you set up your plan with an authorised provider – you can find the full list here.

If you pay into a funeral plan with an authorised provider and that provider fails, you have access to the Financial Services Compensation Scheme which protects your investment.

  • How do funeral plans work?

 Once you’ve chosen your provider, you’ll set out your wishes for your funeral, designing a service or end-of-life celebration that’s exactly as you’d want and at a manageable budget. You’ll pay into the plan monthly, or up-front, to cover the costs of the funeral you’ve designed.

  • Will a funeral plan cover all the costs of my funeral?

 Funeral plans vary but expect your plan to cover things such as your care after your death, transport, coffin, pallbearers, funeral service and administration.

Speak to your funeral director when setting up your plan, but you’ll often find that extras such as flowers, the wake, headstones and burial plots are charged in addition to your plan.

  • What happens if prices increase before I die?

 You fix your funeral costs at the time you take the plan out, meaning that your funeral is less affected by inflation. With ever-increasing prices, funeral plans are a good way to control future funeral costs for those looking after your estate after you die.

  • Can I plan what I want for my funeral in advance?

Yes! You’ll create the funeral that you want, whether that’s a religious service, a secular celebration of life, burial or cremation, and anything in between. You can usually change your funeral plan too if you decide you want something different after you’ve set the plan up. 

  • Why set a plan up now? Could my family not pay for my funeral later with the money I leave behind?

 A funeral plan not only covers essential funeral costs during your lifetime, but you’re creating the funeral that you want for yourself.

Removing the need for those close to you to make decisions at what will be an emotional and difficult time, securing your care after your death and providing financial comfort that your funeral is, in large part, paid for, a funeral plan could make a great difference to those you care about.

And don’t forget: you’ll fix many of your funeral costs at prices today. By leaving payment until later, not only does your family need to find the money to cover costs (which may be before money can be released from your estate), but they could face much-increased prices from providers.

Thinking about setting up a funeral plan? Choose an authorised provider to make sure your investment is protected. Check out the National Association of Funeral Directors or SAIF (The National Society of Allied and Independent Funeral Directors) to find a trusted provider that meets each organisation’s high standards.

This article has been prepared by Adroit Legal services and it is not intended to constitute legal or financial advice.

Practical bereavement support from the National Bereavement Service

The National Bereavement Service supports anyone who has experienced a bereavement, including sudden or traumatic bereavement, with practical and emotional information and advice from professional bereavement advisors with real, lived experience.

We help you to comply with legal requirements, signpost you to providers such as funeral directors and solicitors, and provide a listening ear that helps you through a very difficult time.

For personal, confidential, and practical help following a bereavement, or for advice when planning your future, call the NBS on 0800 0246 121 or visit   

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