Pre-paid funeral plans: Time to end exploitation

Mourners carrying coffin into a church | Poppy's funerals | London funeral directors

Five minute read

You’ve probably seen ads for pre-paid funeral plans everywhere from the telly to the Tube. But these plans aren’t always what they seem.

Pre-paid funeral plans can seem like a reassuring solution — simply pay into a plan and everything will be taken care of after you die. But the reality can be more complicated and, unfortunately, not what many of us might expect. Here’s a rundown of what can go wrong and how to avoid being exploited.

Lack of regulation

While not all pre-paid funeral plans are the same, it’s possible that you may not get what you think you’re paying for. One especially unfortunate outcome is finding that the money someone has paid into the plan is less than the amount that is released for the funeral.

It can be especially frustrating if the reasons why the money is withheld aren’t made clear. Unfortunately, companies sometimes avoid answering questions or even refuse to communicate with family members altogether.

We know of one funeral plan company who did not feel able to share the full details and value of a woman's funeral plan with her executors and next of kin, because they were not the policy holders — their mother who had died was.

They did, however, share this information with us, as funeral directors, and demanded that we did not pass on any of the financial details to the family. The family were understandably confused and concerned that the money their mother had pre-paid was higher than the value of the funds being released.

A big part of the problem is the lack of regulatory oversight. In the UK, the government has recently put forward new legislation to ensure that all pre-paid funeral plans are regulated by the Financial Conduct Authority. But these changes won’t come into effect until summer 2022 at the earliest.

For now, companies are largely responsible for making and adhering to their own ethical guidelines. If they don’t follow through, you can find yourself with little recourse if things go wrong.

However, the Funeral Planning Authority, set up by the funeral sector, does maintain a list of providers who comply with their code of practice and answers to some frequently asked questions about pre-paid funeral plans.

Predatory sales techniques

The Guardian has reported on predatory sales techniques used by one pre-paid funeral plan company. Former staff describe being pressured to sell plans to people who could not afford the payments and encouraged to bombard potential customers with sales calls.

These kinds of predatory sales techniques should have no place in how our society approaches death and dying. But companies can take advantage of our reluctance to talk about death by offering what seems like a quick-fix solution.

This is partially down to the failures of the funeral sector to encourage more open conversations. Unscrupulous businesses can get away with exploiting their customers — because a feeling of awkwardness around discussing death can discourage people from asking difficult questions.

Paying for your funeral without the hidden costs

If you do want a pre-paid funeral plan, we recommend carefully checking the small print. It’s also worth taking the time to really understand where your money will go and what conditions apply. Remember, you’re always free to ask as many questions as you like and should expect clear answers.

Another thing to bear in mind is that funeral plans are not always portable. So if you take out a plan with one company, you may have to stick with them — even if you later decide you want to use a different company. Although you can get your money back to take elsewhere, it’s not always easy and can cost a few hundred pounds in admin fees.

But deciding to avoid a pre-paid funeral plan doesn’t mean you can’t plan for your funeral. There are alternative ways to save for a funeral depending on your circumstances. One option is to use a high interest savings account and to make sure that your relatives know that it’s there for them to use for your funeral. However, these savings will be taken into account if you are means tested for any government or council financial support, including care homes.

After you die, your bank can release funds — with your relative’s permission — to pay for a funeral director, even after the account has been locked. This is because no one can be legally compelled to pay for another person’s funeral. Banks have bereavement teams specifically set up to do this and it shouldn’t be complicated.

While this might sound surprisingly simple, It means that your family is guaranteed to get back the amount of money that you put in — with no hidden costs or caveats.

How to plan your own funeral

It’s also possible to plan the practical details of your own funeral. This can be as simple or as detailed as you’d like it to be.

Read about why Pat took out a funeral plan and Joy's experience of planning her own funeral.

Some questions to consider are:

  • Do you want to be buried or cremated?
  • Where would you like the ceremony to take place?
  • Are there details like flowers, vehicles or music that feel important?
  • Who would you like to lead the ceremony?

It can be helpful to talk about these decisions with friends and family, if this something you both feel comfortable doing. Make sure that someone you trust either has a copy of your plans or knows where to find one.

Keep in mind that you can also work with a funeral director to plan ahead. Don’t be afraid to ask questions and to draw out what feels important to you. You don’t have to think through every detail, but a few simple suggestions can help ensure that you have the funeral that’s right for you.

These steps should help you avoid the potential pitfalls of prepaid funeral plans, without sacrificing any of the benefits.

Looking for more ideas about improving death care? Don't miss why you don't need to embalm and let's open up our mortuaries to the public.

Discover more articles