Guide
What is a pre-paid funeral plan?
A pre-paid funeral plan lets a person choose and pay for the main parts of their own funeral in advance. This guide explains how they work and what to check before arranging one.
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What a plan is
You pay a set amount now, either in one payment or in instalments over a year or more. In return, the provider agrees to deliver a defined funeral when the time comes. The money is held in a trust fund or an insurance policy, kept separate from the provider's own accounts.
The main appeal is certainty. The funeral director's core services are covered at today's prices, so your family is not left choosing, arranging and paying under pressure.
Why people arrange one
- To spare their family difficult decisions during grief.
- To record their wishes: burial or cremation, service or none, music, readings.
- To fix the funeral director's costs against future price rises.
- To keep the money ring-fenced, rather than relying on savings that might be needed elsewhere.
- Sometimes, so that funeral money is not counted in a means test for care fees; rules vary, though, and this should be checked with a professional adviser.
What a plan usually covers
- The funeral director's services: care of the person, arranging everything, staff on the day.
- A coffin from the plan's range.
- A hearse, and often a following limousine on the higher tiers.
- Transfer of the person into the funeral director's care within a stated area.
- On most plans, a fixed contribution towards third-party fees such as the cremation charge.
What a plan may not cover
- Burial plots and cemetery fees are usually excluded, or only partly covered.
- Memorials, headstones and interment of ashes.
- Flowers, orders of service, newspaper notices and catering, unless specifically added.
- Costs if you die abroad, or a long way from the plan's stated area.
How plans are regulated
Since 29 July 2022, pre-paid funeral plans in the UK have been regulated by the Financial Conduct Authority (FCA). Providers must be authorised, must treat customers fairly, and plans must offer genuine value. Buyers now have access to the Financial Ombudsman Service and, if an authorised provider fails, to the Financial Services Compensation Scheme.
Before you buy, check the provider appears on the FCA register. Be cautious of any plan sold through high-pressure phone calls or doorstep visits.
Questions to ask before you buy
- Is the provider FCA-authorised? (Check the FCA register yourself.)
- Is the third-party fee (cremation or burial) covered in full, or only up to an allowance?
- What exactly is not included?
- Which funeral director will carry out the funeral, and can I choose a local one?
- What happens if that funeral director closes, or if I move?
- What are the cancellation terms, and what is refunded?
- If paying by instalments, what happens if I die before finishing, or miss payments?
- Can the plan be transferred to another provider?
Alternatives to a plan
- A dedicated savings account earmarked for your funeral, with your wishes written down and shared with family. Flexible, but not protected against price rises, and the money could be spent on something else.
- An over-50s life insurance policy. Pays a lump sum on death, but over a long life you may pay in more than it returns, and it is not tied to funeral costs.
- Simply writing down your wishes and telling your family which funeral director you would like them to contact. Costs nothing, and comparing prices now, as on Farewell Compare, makes that choice easier for them later.
This is general information, not financial advice. A pre-paid plan is a significant purchase and suits some people and not others. Consider speaking to a regulated financial adviser about your own circumstances.