What is a prepaid funeral plan?

Sooner or later every one of us will need a funeral. Therefore, it is surprising how relatively little thought is given to how it is going to be paid for and by whom.

Too often, for example, the expense of meeting those funeral costs has to be shouldered by the family and friends who are already struggling to cope with the grief and mourning of your death – they are hardly in the best position to make decisions about how much to spend or what is a fair price.

To make matters worse, the average cost of a funeral in the UK has been increasing by leaps and bounds in the past few years. The basic cost of the funeral service alone is currently around £3,800 – with a further £2,000 typically spent on additional services such as floral tributes, memorial stones, cars for mourners and a wake or reception.

The burgeoning costs – which are estimated to have doubled in the past 14 years – have given sufficient concern for them to be investigated by the Competition and Markets Authority, according to a report in the Guardian newspaper on the 1^st of June 2018.

Prepaid funeral plans

The investigation throws into stark relief the benefits of preparing now for your funeral and arranging payment in advance through a prepaid funeral plan.

Comparison website Over50choices makes the point that not all prepaid funeral plans are the same, and you may, therefore, want to make a point of comparing those on offer before settling for the one that meets your individual needs and circumstances:

Funeral Planning Authority

• is your chosen provider regulated by the Funeral Planning Authority (FPA), for example;
• regulation by the FPA ensures that member providers are bound by a code of practice which puts customers’ interests first and foremost and ensures adherence to higher than usual standards;

Standard of service

• ensure that your prepaid funeral plan guarantees cover of the cost of the funeral director’s services;
• typically, this is achieved through a separate contract between the funeral plan provider and the funeral director concerned – with the latter undertaking to provide the agreed services at a price determined at the outset, with any variation or increase borne by the funeral plan provider;

What services?

• it is worth repeating that not all prepaid funeral plans are the same;
• you might want to look closely at just what services are to be provided by the funeral director in question and consider those plans which also cover such costs as cremation fees and those of the minister celebrating the service – some prepaid funeral plans also guarantee these costs;
• as a basic minimum, you are likely to guarantee the professional advice of a funeral director, preparation of and care for the body, a coffin, a hearse, services on the day and – depending on the particular plan you choose – the provision of limousines for mourners;

Payment options

• you may also want to take into account your payment option – whether you choose to pay in full at the time you buy the funeral plan, a monthly payment schedule over the course of a year (which may be offered without the need for a deposit), or payment of a deposit, followed by instalments spread over as many as 25 years.

Not all funeral plans are the same, so careful comparison is necessary. There are lot of prepaid funeral plan choices for the over and under 50s, so comparing your options and, if necessary, seeking financial advice, may be your next step.