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Planning and paying for your funeral

Many people worry that when they die, they won’t leave enough money for their funeral and those organising the arrangements will be left with the bill. With a funeral plan, you arrange and pay for it in advance, giving you peace of mind that most of the costs will be taken care of and your wishes respected.

 

Find out how funeral plans work, how much they cost and other ways to pay for your funeral.

Planning your funeral

You can plan for your funeral by writing down what you want and telling someone where you’ve written it down. You might even give them a copy.

To ensure your wishes can be followed you need to know how the costs of your funeral will be paid. 

This page looks at funeral plans as the main way to plan and pay for your funeral in advance and compares them with other ways you could save up to meet the costs. 

What is a funeral plan?

A funeral plan lets you pay in advance for some of your funeral, at today’s prices. You can buy a plan from funeral directors and funeral plan providers. 

The money in the plan can only be used to pay for funeral costs. Once you’ve decided what you want included in your plan, you pay for it with either a lump sum or in monthly instalments over an agreed period that can be typically from one to ten years.

If you can, it’s best to pay for your funeral upfront with a lump sum. Paying in instalments over several years will cost more because of administration fees and interest. For example, according to consumer experts Which? paying over five years (60 months) can add as much as 15% to 26% onto the cost of your plan.

If you are paying in instalments and you die within 2 years of taking out a funeral plan, the amount you’ve paid may not cover the cost of your funeral. In these circumstances your provider will refund what you’ve paid to your executors. However, some providers underwrite their plans so that if you die within 2 years of taking out a plan, they can cover the cost of your funeral. Before you decide to pay in instalments for a funeral plan, find out what would happen in these circumstances.  

You also need to be sure you’ll be able to meet the cost of the monthly payments until the end of the agreed period.

How do providers guarantee there will be enough money to cover the costs of my funeral?

Your money is either held in trust or in a whole of life insurance policy, separate from the funeral plan provider. This protects your money and ensures that even though you have paid for your plan at today’s prices, there will be enough money to cover the rises in costs when the time comes to pay for your funeral. 

This is because your money is invested along with that of other policy holders into a range of investments, securities and cash that will grow over time. Your money is also protected by the Financial Services Compensation Scheme if your provider goes out of business.

Is a funeral plan a good option for me?

Before deciding whether a funeral plan is right for you, it’s important to consider the benefits and disadvantages of getting one.

Pros
  • They can protect you against inflation. So even if funeral costs go up, your funeral plan won't be affected. The cost of a funeral has historically risen faster than interest rate returns in a savings account.

  • Funeral plans are now regulated by the Financial Conduct Authority. This means you should get the funeral you’ve paid for, and your money is protected.

  • If you’re one of the 5% of estates that pay Inheritance Tax, it’s worth knowing that a funeral plan is not included as an asset when calculating Inheritance Tax.

  • Normally the money in a plan is not included in the assessment of savings for means tested benefits or care costs. If you’re not sure check with your benefit provider or local authority. 

Cons
  • Most standard plans don't cover all the costs of a funeral, so if anything is left to be paid, this will come out of your estate or the person or executors organising your funeral will be left with the bill.

  • Going for a cheaper plan means you have less control over what your plan will cover. For example, you might not be able to have the type of funeral you want, there could be a limited choice of funeral directors, and constraints on the time and date of the funeral.

  • If you die and the person organising the funeral wants to make changes to the arrangements, they would need to cover those costs.

What is included in a funeral plan?

The cost of a funeral plan will vary depending on what kind of funeral you’d like. All plans include the services of a funeral director who takes care of the deceased, arranges the funeral and organises transport of the body to the place of rest. 

Things which might affect the cost include: 

  • what type of funeral and ceremony you want
  • the type of coffin
  • which provider you choose
  • where you live in the UK as local costs can vary.

The cost of a funeral plan paid ranges from £2500-£5000 if you pay up front in one lump sum. Cremation plans are usually cheaper than burial plans, but they can be as low as £1500 if you choose a direct cremation without a ceremony.

Types of funeral plans

Providers typically offer three different types of funeral plans: 

  • Basic: might just cover the cost of your burial or cremation, have restrictions on time and date of the funeral and when your loved ones can view the body.
  • Standard: might provide a limousine for the funeral procession, basic coffin, along with the cover provided by a basic plan.
  • Comprehensive: might provide expensive coffins, limousines for the funeral procession and to transport guests to the funeral, more flexibility in access to view the body in a chapel of rest, and extras.

The table shows what is typically offered in a standard funeral plan for a burial or a cremation. Be aware, what is covered will vary from provider to provider.

Standard plan
What's usually included? What costs aren't included?

Funeral director and arrangement for funeral

Burial plot

Advice on the certification and registration of the death and related documentation

Headstone or memorial

A simple coffin for example, wood effect, cardboard or wicker

Expensive coffins, for example solid wood, metal

Collection and transportation of the body to the funeral director’s premises within the milage restriction

Flowers

Care of the body prior to cremation

The wake/catering

Access to view the body in a chapel of rest or service rooms

Limousines to transport guests to the funeral

Funeral service at a local cemetery or crematorium

Embalming

Funeral procession to the funeral location

Order of service

Hearse to a local cemetery or crematorium

Minister or Officiant fees

Pallbearers

Burial or cremation fees

Transportation to the funeral director’s premises if death occurs whilst on holiday in mainland UK

Medical certificates (for cremation only)

An allowance towards third party costs

Newspaper/online notices

Medical certificates (for cremation only)

What happens if I miss payments?

If you’re paying instalments and you’re struggling to pay, contact your plan provider as soon as possible. They should be able to work out an affordable solution to suit your needs.

If you miss a due payment, your plan may lapse. This could result in your plan being cancelled.

If your plan is cancelled, you won’t lose the money in it, like you would with most over 50s insurance plans. These are general insurance plans often advertised as a way to pay for your funeral costs, although the money in them can be used for anything.

However, any money left in the plan won’t continue to grow and it’s likely there won’t be enough to pay for the costs of your funeral.

What happens if I want to cancel my plan?

You won’t lose all the money you have paid in. Most funeral plan providers will charge a cancellation fee of a few hundred pounds. After this is taken off, you will normally be refunded the amount left in the plan. 

You can ask to leave what you have paid in the plan to be used as a contribution to your funeral when the time comes. 

However, if you do this, the sum is likely to be eroded by inflation as it won’t grow in the same way as it would if you had kept up with payments.

Is my money safe in a funeral plan?

Since 29 July 2022, all firms selling pre-paid funeral providers are regulated by the Financial Conduct Authority (FCA).  

This means all providers must make sure:

  • Your money is held in trust or as a whole of life policy, so it is safe and protects you from inflation so you’ll never get less back than what you paid in, and the amount should grow to cover future funeral costs.
  • You get the plan you’ve paid for at a fair price, and that it meets your needs. 
  • You get the information you need to make an informed decision before buying a funeral plan.

You’ll also have the right to: 

  • Complain to the Financial Ombudsman Service (FOS), if you’re not happy with the way you have been treated. It’s a free and easy to use service that resolves disputes fairly and impartially and has the power to put things right. 
  • Have access to the financial protection offered by the Financial Services Compensation Scheme (FSCS). This means if the funeral provider goes out of business, you may be able to claim compensation or receive a replacement funeral plan. 
  • Get the service you paid for. For example, funeral instalment plan products will always deliver a funeral as the FCA has banned those that don’t guarantee this.

You can find a list of funeral plan providersOpens in a new window on the FCA website.

Questions to ask the funeral plan provider

If you’re considering buying a funeral plan, you might want to ask the provider the following questions:

  • Are there any cancellation charges?
  • What exactly is included in the plan and what potential costs aren’t?
  • Is it possible to cancel the plan if circumstances change – for example if you’ve arranged for your spouse’s funeral but you later separate?
  • Does the plan allow you to choose the funeral director?
  • What if your chosen funeral director goes out of business?
  • What happens if the person the funeral is intended for dies abroad or away from home?
  • Can the funeral director arrange a funeral of a different standard from the one you’ve chosen?
  • If you pay by instalments, how long do you do this for and do you have to pay interest?
  • What happens if there are outstanding instalments when you die?
  • What freedom do you have to change the details of your funeral plan?

How do I buy a funeral plan?

Check the FCA website – make sure you pick a plan from the list of authorised funeral plan providers. They also have a list of providers that have not been approved to sell funeral plans.

Shop around by comparing providers and plans – you might make big savings. Compare funeral plans and providersOpens in a new window on the Which website. To see ratings of funeral plans and cremationsOpens in a new window, see the Fairer Finance website

Watch out for extra fees – some providers may include commission and administration fees in the final cost. 

Read the terms and conditions carefully – you must make sure the details are right or you might not be covered.

Other ways to financially plan for your funeral

A prepaid plan isn't the only way of ensuring your loved ones don’t have to cover your funeral costs and won’t necessarily include everything you need. Here are some alternatives to think about before you decide.

Compare regular life insurance

Some life insurance policies offer more generous cover. See our table for some of the main features to help you compare in our guide What is life insurance?

Put money into a savings account

Putting a little money aside each month is one straightforward way to save for a funeral.

This isn’t risk-free though, as you might die before you build up enough to pay for a funeral. And it’s likely that funeral costs will rise faster than the interest earned on your savings. Whereas when you buy a funeral plan it’s guaranteed, and you are paying for it a today’s prices even if you die in 20 years' time.  

If you have easy-access cash savings, most banks or building societies will release funds for funeral costs before probate is finalised and before Inheritance Tax is calculated. An itemised bill from a funeral director and a copy of the death certificate is usually all that’s required. 

If you have a joint account, they will still have access to the full sum of money.

Check death in service employment benefits

If you’re still working, some employers pay a fixed sum if you die.

Typically, this is a lump sum three to four times your annual salary paid to a nominated family member. So you may want to delay setting up a funeral plan until after you retire or change jobs with less generous benefits.

If you’re a member of a trade union, professional body or other association, they might pay a benefit when a member dies. Contact them to find out. 

Compare over-50s life insurance plans

If you’re age 50 or above, an over 50s life insurance plan guarantees to pay out a cash lump sum – known as a ‘payout’ or ‘sum assured’ – to your beneficiaries when you die. 

If you’re considering a funeral plan, check it isn’t an over 50s insurance plan even if it is advertised as a way to pay upfront for your funeral. There are important differences between over 50s plans and funeral plans that you need to be aware of. In particular, over 50s plans usually pay out a lump sum which does not increase in line with inflation and so it might not be enough to cover the full cost of a funeral.

Another possible downside is that you could pay more in to an over 50s plan than you’ll get out at the end and if you cancel the plan before the end of the term, you will lose all the money you have put in. 

Find out how they work and what to watch out for in our guide Over 50s life insurance – is it worth it?

Use the money you leave behind in your estate

You might have assets that can be sold when you die, such as your house, investments or valuables. You could make it clear in your will that you want these to be used to pay for your funeral.

Bear in mind it can take some time for properties or other assets to be sold and the estate to be settled after someone dies. So, it’s worth talking to whoever you want to arrange your funeral and checking that they have enough to pay upfront.

If you can’t afford to take out a plan

If you’re worried you can’t afford to take out a plan for your funeral or save in other ways to meet the costs, you can find out more about the support that may be available to those organising your funeral in our guide Help paying for a funeral.

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