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Thinking about the future? And how you’d like your funeral to look? A funeral plan may be the right option. Here we’ll take you through how a prepaid funeral plan works so that you can weigh up all your options.

What is a funeral plan?

A funeral plan (sometimes called a prepaid funeral plan) allows you to organise and pay for your funeral in advance. With a prepaid funeral plan there is less for your loved ones to organise and pay for. Arranging one with a funeral director now may be a good way of telling your family what you’d like at your funeral, making it a little bit easier for them in the future.

How do funeral plans work?

A prepaid funeral plan lets you cover the cost of your funeral at today’s prices. Even if funerals cost more in the future you’ll pay today’s costs. But each funeral director may have different plans and what’s included may change from one provider to the next. So it’s worth keeping in mind that a funeral plan may not cover every part of the funeral. Your family may still have to pay towards some parts of the funeral that aren’t included in the plan.

What does a funeral plan include?

Prepaid funeral plans usually include the basic parts of a funeral such as:

  • Funeral director’s services (taking care of the person who died and transporting them to the funeral home)
  • Chapel of rest
  • Coffin
  • Hearse

They may also include third party fees like cremation or burial costs. But always check this with the funeral director as it may not always be the case. Some providers may offer an allowance towards burial or cremation costs. This means that they’ll pay towards some of the cost for burial or cremation. But your family will need to add to this pot to cover the whole cost.

If the funeral plan you choose is more extensive it could also include:

  • Doctor’s fees
  • Celebrant’s fees
  • Limousines
  • Crematorium fees

Other services that are not part of most prepaid funeral plans include:

  • A burial plot
  • Flowers
  • Memorial or headstone
  • Order of service sheets
  • Funeral notices
  • A wake and catering

Some funeral plans allow you to make a contribution to some of these optional items. For example, you could contribute £100 to pay for flowers. Then when the plan is paid out, your family will have £100 to put towards the cost of the flowers. But keep in mind that this may not cover the full cost of the flowers, especially if prices rise over time.

Any additional services that aren’t covered in full or part by your plan will need to be paid for by your estate or by family members instead. So if there are specific extras you do or don’t want at your funeral, it’s a good idea to make a note of these and let your family know.

How much is a funeral plan?

Standard funeral plans start from around £1,800 and go up to around £4,500 for larger plans with more services included. Though you could pay more than this if you choose a bespoke package that allows you more extras*.

Keep in mind that the more you pay, the more your plan is likely to cover. But it’s always a good idea to compare plans so you get a clear idea of what’s actually included and what won’t be covered.

The cost of a funeral plan will also be different depending on the funeral director you choose and where you live in the UK. Prices tend to change from region to region. If you live in London, for example, you could be paying more for a funeral plan than if you live in the Midlands.

Read our guide to how much a funeral will cost for a full breakdown of average costs across the UK.

How do I pay for a funeral plan?

Most funeral plan providers will give you a few options for payment. You could:

  • Pay all funeral plan costs upfront – if you can afford to pay a lump sum this will be the cheapest option because you won’t have to pay any interest.
  • Spread the cost over 12 months – with this option you may have to pay interest depending on the provider. But it may help you manage the cost. Keep in mind that if you choose this option and you were to pass away before the payments finish the provider may only be able to refund the money. This could mean that your family have to pay for the funeral after all.
  • Spread the cost over a number of years – If the cost is not manageable over a year some funeral plan providers will offer a longer time period to pay off smaller instalments. You’ll probably pay interest on this. And there is also the risk that you pass away before paying off the plan. But some providers will still cover the cost of your funeral if you pass away after 2 years of making payments. Check this with the funeral plan provider before you choose this option as it may not always apply.

Are funeral plans safe?

From 29 July 2022 the Financial Conduct Authority (FCA) started regulating companies that offer prepaid funeral plans. So if you take out a funeral plan you’ll now have more financial protection. This means that when you take out a funeral plan with an authorised provider you’ll either get the funeral you paid for or a refund even if the company gets into financial trouble. So a prepaid funeral plan is a safe option as long as you go with an authorised provider.

If you’ve already organised a funeral plan you can check whether the company you used is an authorised provider. Use the FCA register to find out more.

What happens if the funeral plan company I've chosen goes bust?

In the UK, funeral plans are regulated by the FCA. This means that as long as you choose a funeral plan provider who is authorised by the FCA, your money is protected. If the company who you bought your plan from goes out of business, your plan will be transferred to another funeral plan provider. You have the option not to transfer and to ask for a refund instead. Though keep in mind that the refund might not be for the full amount you originally paid.

You can use the FCA register to find authorised funeral plan providers.

Can funeral plans be transferred?

This depends on the pre-paid funeral plan provider you've chosen. It's often possible to transfer your plan to another funeral director in the same group or brand. You might need to do this if you move home and the funeral home you originally chose is no longer nearby.  Keep in mind though that depending on local prices, you may need to pay some extra money to transfer.

Some prepaid funeral plan providers also allow you to transfer your plan to a family member or friend who dies before you. This means you can use your plan to cover the cost of their funeral instead. It's worth asking your provider about this when you set up your plan, as you'll likely need to name (or 'nominate') a specific person in advance.

Can I change my funeral plan?

Yes, most providers will allow you to change your funeral plan, though it's worth keeping a few things in mind:

  • Some providers only allow you to make changes to your plan once you've paid for it in full
  • You may only be able to make a set number of changes to your plan, for example, only changing it once a year
  • If you add extra items or requests to your plan you'll need to pay extra to cover the additional costs

Each funeral plan provider is slightly different, so it's always worth checking with your provider about what changes you can make.

Are funeral plans a good idea?

Are prepaid funeral plans worth it? As funeral costs can add up to thousands of pounds a funeral plan may help you manage things better. And take away that immediate stress from loved ones in the future when you pass away. But there are pros and cons to organising a prepaid funeral plan. Here are a few things to think about before you decide if a funeral plan is the right option for you.

Pros Cons
You’ll pay for the funeral at today’s costs (escaping rising costs in the future) There’s a chance that it could cost you more if funeral costs fall in the future
It means your family will have less financial stress when you pass away The funeral plan isn’t likely to cover every part of the funeral
You’re able to choose the parts of the funeral that are most important to you There may be set limits on what is and isn’t included as part of the plan

With so many plans and prepaid funeral costs to compare it can be tricky to find the right one. A good place to start is by finding the funeral director you'd like to use. You can the talk to them about your options and how much it will cost.

Talk to a funeral director

Use our funeral director finder to find out more about prepaid funeral plans.

*Prices gathered 9th September 2022 and based on costs from the following national providers:


Photo by People Images on iStock.