A simple guide to pre-paid funeral plans in 2024

A pre-paid funeral plan purchased before you die allows you to arrange and pay for your funeral in advance.

There are many reasons why planning your own funeral ahead of time can be prudent, not least because bereavement can be a very distressing time, and planning a funeral in advance can help relieve the pressure on those who are taking care of your funeral. Given how flexible pre-paid funeral plans can be, you can choose a plan that suits your needs.

One of the main benefits of having a funeral plan is that it helps plan costs in advance, allowing you to spread the cost over time. It also enables you to start a conversation with your family members around your funeral wishes and what your preferences will be when it comes to your funeral.

This guide looks at what a pre-paid funeral plan is, what has changed since 2022 following regulatory changes around pre-paid funeral plans, things to consider when choosing a funeral plan, and if funeral plans are really worth it in 2024.

What is a funeral plan?

A pre-paid funeral plan (PPFP) lets you pay for a funeral in advance and at the time of death will pay out an amount defined by the funeral choices stipulated at the time of arrangement.

It is not an investment vehicle and will either pay for the services of your funeral director or can be cancelled and partially refunded, minus administration costs.

Having the peace of mind that the cost of your funeral will be covered by the funeral plan not only removes uncertainties, but also guards against future price rises. The majority of pre-paid funeral plans will guarantee / include the following:

  • Funeral plans are usually specific to an individual although some allow you to name two individuals and the plan can be issued for the person who dies first
  • The cost of the pre-paid funeral plan is guaranteed, meaning that you are paying at today’s, not tomorrow prices.
  • You need to be at least 18 years of age to apply.
  • Payment options can vary such as paying a lump sum, paying monthly over 12 months, or over 25 years. With a longer-term plan, you will be charged interest.
  • No medical questions apply and there is guaranteed acceptance.
  • Funeral plans are exempt from inheritance tax.
  • What is included in the plan will vary. Not all costs associated with a funeral are included. Crematorium fees, burial plots, headstones, and embalming usually come as extras so it is worth checking out all the small print in your plan.

The difference between trust based and insurance backed funeral plans

There are two types of PPFP, namely trust based plans and insurance backed plans. In essence they work in the same way, with the difference being the investment vehicle for client funds. In the case of the trust, the funds are placed into a pool and invested for protection and growth as part of a whole portfolio. With insurance backed plans, the funds are used to purchase an individual insurance policy, with the insurance company then investing the funds as they see fit.

The new regulation for pre-paid funeral plans

The pre-paid funeral market was associated with poor standards and in some cases, consumers not receiving the funeral that matched their expectations. Concerns were raised around misrepresented information within the pre-paid funeral plan sector, plus pressurising sales tactics from providers. Therefore, the government introduced a new regulatory framework. Since July 2022, the Financial Conduct Authority (FCA) regulates the funeral plan market. This protects consumers and provides a dispute resolution service if things go wrong.

Things to consider when taking out a pre-paid funeral plan

We would recommend that you ask the following questions before taking out a funeral plan:

  • What type of funeral would you like? Would you prefer a cremation, burial, or a funeral without a ceremony such as a direct cremation?
  • What is your budget and over what period would you like to pay for your funeral plan?
  • What does the funeral plan include and what does it exclude? Are there third-party costs that will be charged for later?
  • Can you personalise your funeral plan?
  • Are there cancellation charges that apply should you decide you don’t want the plan
  • Can you appoint a local funeral director, and can you change funeral director if you choose to, or move area?
  • Are there any restrictions on the time and date of a funeral?

Are funeral plans worth it?

Funeral plans can alleviate the emotional and financial burden on your family during an emotional and distressing time. If you have the funds available now and are concerned that they may not be available in your estate at the time of your death, funeral plans can be worth it. They also allow you to state your own funeral wishes which can be extremely comforting to your family when the time comes.

However, in some plans where burial plots are not included, costs can vary dramatically. Location plays a key role in dictating burial plot costs. Sometimes it is more prudent to consider pre-purchasing a plot, which can protect against diminishing space available and the inflation of grave purchase prices.

Working with Golden Leaves

We offer a range of tailored, bespoke, or no ceremony funeral plans and our prices start from £2780. All our funeral plans are provided in partnership with Golden Leaves who have been working in funeral planning since 1984. Golden Leaves is authorised by the FCA.

If you would like to find out more about our pre-paid funeral plans, visit our Compare Funeral Plans page, or contact us to make an appointment to speak to one of our colleagues (please use the search box below).