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With funeral costs often reaching £5,000 or more, more and more careful people are taking pre-paid funeral plans.
What do those plans cover? Are they worth it? How much will you have to pay?
This all-you-need to know guide will allow you to compare the best pre-paid plans of the market in 10 seconds, and get to know everything about funeral plans: cover features, prices, tips and much more. Let’s dive in!
Table of Contents
Consult our trusted funeral plans providers
What is a pre-paid funeral plan?
A pre-paid funeral plan lets you organize and pay for your funeral expenses in advance. The cost of the funeral service, limousine, care of your body, and other requirements can be paid for in advance, and this can take the pressure off your family.
Basically, those funeral plans allow anyone to pre-pay and plan their own (or someone else’s) funeral with the chosen provider. That way, when the time comes, no one has to start from scratch, or use their own financial resources, to take care of the painful and expensive duty of laying you to rest.
With a pre-paid funeral plan you will not only protect your relatives and loved ones against unexpected costs related to your own funeral, but you will also be sure that things happen the way you want them to.
Top things you need to know when getting a pre-paid plan
- A funeral plan allows you to pay for the major costs of your funeral ahead of time.
- You can pay a lump sum, or by instalments.
- However, funeral plans don't include everything. For instance, a wake, a memorial, or the cost of floral tributes, won't be covered.
- The cost of a burial plot won't be included. You will need to make separate arrangements for that.
- Your money will be kept safe in a separate funeral insurance policy or trust account if you have a plan with an FPA member firm.
- Pre-paid funeral costs don't count as part of your estate. That might help prevent your heirs having to pay inheritance tax.
Funerals during lockdown
The coronavirus situation has had a huge impact on funerals, with restrictions on the number of people who can be present, less flexibility on dates and times, and other restrictions. A funeral plan may have paid for some things that can't be provided.
Different plan providers have different policies, but normally there are a number of ways this can be dealt with.
- Some will provide a lower cost funeral and give a refund on the plan.
- Some will provide a lower cost funeral now, but offer to hold a memorial service at a later date to provide extended family and friends with the chance to say their goodbyes.
Ideally, you should discuss this with the plan provider and undertaker while making the arrangements, so everyone knows what is possible, what's not possible, and what has been decided. However, in some cases this may not have been possible and you may need to talk about a refund after the funeral has happened.
If a plan provider is not helpful, the Funeral Planning Authority (FPA) may be able to help you. It regulates the funeral plan sector and has the authority to carry out investigations and resolve the situation.
What funeral plans do I need if…
|I want a big funeral, the price is not a problem||At least 1 limousine and a high quality coffin||Superior, check out age.uk's Rowan Plan: 2 limousines, no cancellation cost, and no cap on cremation costs|
|I want something nice but not too much||No limo but a quality coffin||Golden Leaves Silver Plan is worth considering: it's modestly priced for this level of coverage, though at £673 the cancellation fee is high|
|I don’t want too spend a lot in my funeral, I want something simple||0 limo, a standard quality coffin||Age UK's Basic plan is one of the least expensive on the market and has a good level of cover, though choice of time and date may be restricted.|
Is prepaid funeral cover worth it?
With the rising cost of funerals, reaching up to £5,000 or more, prepaid funeral cover is well worth having. We think so, and more and more people agree with us - about a fifth of all British funerals are now paid in advance through funeral plans.
The key benefits of pre-paid funeral plans are:
- they give you and your loved ones entire peace of mind regarding how things will be handled;
- you will take the pressure off your children, step-children, or other relatives when the time comes - financially but also emotionally;
- you will have things organized the way you want (cremation, eco-funeral, religious or non-religious funeral, etc.);
- funeral plans protect you against inflation in case funeral costs increase;
- prepaid funeral costs don't form part of your estate for the purposes of inheritance tax, so if you're close to the £325,000 limit (including your home), it could save your heirs money;
- pre-paid plans can become very advantageous if you live in a really expensive place such as London, where a burial plot cost can cost as much as £10,000 and funeral directors charge high fees for their services.
However, some costs are set by third parties. For instance, local authorities set the cost of a cremation. A funeral plan won't protect you against an increase in third-party costs.
Pre-paid funeral plans are generally marketed to the over-50s and can also be worth it for those suffering from serious medical conditions or who take high risks at work. However, anyone aged of 18 or over can apply to a pre-paid funeral plan.
Alternatively, you could simply decide to save money to cover funeral costs in a bank deposit account. However, this will not protect you against rising prices. If you save £5,000 but by the time you die, funerals cost £10,000, your family will be out of pocket. And that money will form part of your estate for inheritance tax purposes.
How do pre-paid funeral plans work?
They are three different ways to pay for your pre-paid funeral plan:
- Lump sum: you can pay in full at the time of purchase. This is a popular option for those who have the money available. It lets you avoid inflation, and takes the financial pressure off your family right from the start.
- Monthly, over 12 months. This is a good in-between option as it will allow you to decrease the risk of funeral cost inflation but the monthly payments are more affordable than a lump sum. However, if you die before the whole sum is paid off, your family will have to find the remaining balance.
- Spread the total cost over several years (starting with just two years, but can extend up to 30 years). These monthly premiums are very affordable, starting at only a few pounds per month. However, your loved ones might have to pay remaining installments, and the cost will typically be 10% higher than with a lump sum or twelve-month plan.
Some plans used to be sold for a fixed monthly amount to be paid every month. However, these penalised you for living to a ripe old age, as you would end up paying far more than your funeral could ever cost. Very few providers now offer such a plan and we wouldn't advise you to buy one.
Pre-paid funeral plans are not, at this time, regulated by the Financial Conduct Authority but are about to be. Meanwhile, if you are planning to buy a funeral policy, make sure your provider is registered with the Funeral Planning Authority.
How much is a funeral plan in UK?
The average cost of a funeral in the UK is £3,946 for a cremation and £4,893 for a burial. But of course that's just an average, and the actual amount can vary widely. Some people choose a stripped-down, low-cost funeral while others choose to spend significantly more on a truly memorable send-off. For some, it's a low-key event with a wicker coffin at a woodland burial site, for others, a horse-drawn hearse, hundreds of mourners and a wake till the early hours afterwards (though you won't get a horse-drawn hearse even with a top notch funeral plan).
Let’s find below indicative funeral costs and pre-paid monthly premiums, depending on the type of funeral you have in mind. The two biggest changes when you step up a plan are a higher quality coffin, and the hire of one or, at the top level, two limousines for mourners. You'll also often find a slightly higher cap on total cremation or burial costs, which can mean that a celebrant's fees will be covered as well as just the cost of interment or cremation. But a cheap funeral plan will provide all of the basics for a dignified and appropriate farewell - you just won't have some of the extra frills that come with the higher cost plans.
Most basic plans cover a funeral procession from the funeral directors only to the crematorium or cemetery. Higher level plans will often also include the procession to a religious ceremony, and to the interment site or crematorium afterwards.
What does a funeral plan cover?
The best prepaid funeral plans include:
- a high quality coffin;
- transport of the body from home, hospice or hospital to the funeral directors;
- care of the body until the funeral ceremony;
- visits to the chapel of rest for family and friends;
- funeral procession from funeral directors to the church or other service location, and then on to the crematorium or burial site;
- limousines for the mourners;
- the provision of a hearse and funeral directors' staff for the funeral;
- help with the formalities such as registration and certification of death;
- help with the arrangement of the funeral;
- doctor's fees that are needed for cremations (except in Scotland);
- fees for a minister or celebrant.
|Basic cover||Standard||Comprehensive cover||Superior|
|Limousine||0||0||1 or 2||2|
|Coffin||Simple||High quality||High quality||Best quality eg oak veneer|
|Procession||To crematorium/cemetery||To service, then crematorium/cemetery||To service, then crematorium/cemetery||Flexible|
|Funeral home visits||Weekday business hours by appointment||Weekdays at any time||Any time by appointment||Any time by appointment|
What does pre-paid funeral plans not cover?
Although funeral plans cover many of the costs of a funeral, they don't cover all the costs you might incur. For instance the following won't be covered:
- Any memorial, whether that's a headstone or a small tablet in a Remembrance Garden;
- the cost of a burial plot, which can cost from £750 up to £2,000 even outside London;
- obituary or funeral notices in local newspapers;
- order sheets for the funeral service;
- extra body care such as embalming;
- funeral flowers;
- extra music such as a church organist or choir / soloist;
- catering or a wake.
Burial plots can be extremely expensive, reaching £10,000 in some areas of London, though in rural areas they often cost a lot less. Natural burial sites are often cheaper (though you need to make sure all the materials used are biodegradable). If you belong to a mosque or synagogue congregation, it may have its own separate burial ground or have special arrangements with a local cemetery. Make sure you’ve taken this into account in your calculation. On the other hand, if you are planning for your heirs to scatter your ashes in a favourite place, you won't need to worry about such costs.
If you move home, check that your plan still works for the new location. Most plans have mileage limits, and you will need a funeral director who is able to take on the business within that area. Some plans allow you to choose your own director, but may charge you an administration fee for the privilege.
Pros and cons of funeral plans
The advantages of taking out a funeral plan are:
- no one can take advantage of your family in distress by trying to sell them an expensive funeral or overcharging them for the service;
- your heirs will not have any financial problems since the funeral has already been paid for;
- you are protected against increases in funeral costs;
- if you live in an expensive area like London, you may find better pricing with a funeral plan (which sets prices nationally) rather than going directly to a local funeral director;
- you can decide what sort of funeral you want.
But there are a few negatives, too.
- The most basic funerals can cost less than a plan. In some rural areas you may find the plans more expensive than going direct to a funeral director.
- Inflation proofing is useful, but very ill or very old people who are likely to die within a few years won't really get a benefit from it.
- A restricted choice of funeral director on some plans could mean less choice of time and date.
- There has been some mis-selling of funeral plans in the past. Make sure you get a plan with an FPA member and do your research properly.
Funeral plans which are paid by instalments can also fail to help your family if you die before paying the whole amount - they will have to pay the remaining balance. However the Co-Op, uniquely, promises to cover the whole cost if you've paid more than a year's premiums (as long as the plan would have been paid off by the time you turned 80), even if the plan hasn't been fully paid off.
What are the best funeral plans?
Below, we highlight some of the best funeral plans together with the reasons for our choice. Nearly 30 different plans are available, all with slightly different coverage and different pricing. We divide them into four price ranges - basic, standard, comprehensive and superior. However, the way different plan managers divide their plans may be slightly different, so that a comprehensive plan from one provider may be as good as the superior plan from another. You do need to check the details before you make a choice.
What are the extras that I can add to the plan?
Some providers allow you to tailor-make a funeral plan. The Co-Op for instance will allow you to add the following to the standard cover;
- a memorial to your specification, or the cleaning and re-cutting of an existing family memorial;
- extra limousines;
- flowers and order of service;
However, you can't add a burial plot to the plan. You will need to take charge of this or leave it up to your family.
Can I take out a plan for someone else?
You can't use your own funeral plan for someone else. But if you want to buy a plan for your elderly parent, or for a sibling or elderly uncle, let's say, you can. Age UK, for instance, will address all the communication to the person who took out the plan, not the planholder. That means if you don't want to talk about the subject to them - and it can be a very difficult subject to broach - you don't have to.
Should you pay your prepaid funeral cover in full or monthly?
Funeral costs can be heavy. Paying in full for £3000 or £4000 is not an easy thing. That's why many providers will let you pay monthly over a more extended period of time.
But if you take the multi-year monthly option, you could end up paying between 10% and 20% more for your funeral plan, as an interest charge will be added to your funeral cover cost. If you can afford to pay in full for your funeral plan in a lump sum, or with twelve monthly payments, you'll pay less.
Yes, you can. A pre-paid funeral plan or 'funeral insurance' lets you pay now, and pay today's price. The cost of a funeral may increase, but your payment won't.
Yes, it is a smart option to prepay your funeral expense payment. The average cost of a funeral is well above £3,000, and prices have increased over the years by more than inflation. By paying now, you lock in today's prices, while also helping your family by ensuring they don't have big bills to pay.
Most plans (though not Age UK's) include cancellation charges. These are generally of the order of £200-300, though Golden Leaves and Memoria charge more, particularly on the higher value plans.
However, if you cancel, you will get back all the money you have paid, less the cancellation charge. (The only exception is the old-style monthly payment for life plan, but these are no longer common and we haven't included any here.)
Funeral plans aren't regulated by the Financial Conduct Authority so your money isn't as safe as it would be in an FCA-regulated bank or insurer.
However, 95% of funeral plans and all the plan we mention on this page belong to the Funeral Planning Authority. The FPA sets rules, has a code of practice, and adjudicates in cases of dispute between funeral plans and their customers. It stipulates that the money you pay must be invested in a funeral insurance policy with a regulated insurer, or in an independent trust fund - the funeral plan company can't keep it in its own account. So your money will be ring-fenced, which does make it pretty safe.
The FPA has a page on its website which can help you to track down a funeral plan.The FPA will send the details of the plan holder to its members, and they check against their registers to see if a plan has been taken out.