What Is a Funeral Plan?

A funeral plan is a pre-arranged and prepaid service, allowing a person to organise and pay for their funeral before they pass away. It can be tailored to fit personal, cultural and spiritual preferences. A funeral plan ensures that your specific funeral arrangements are carried out and that associated costs are covered. You can organise a funeral plan for yourself or on behalf of a loved one.

What Does a Funeral Plan Include?

A funeral plan includes a detailed list of arrangements and their costs. A standard funeral plan usually includes the following [1]:

• Advice on registration and certificate of death
• Funeral director services and funeral arrangements
• Care of the deceased before cremation or burial
• A simple coffin or urn
• Collection and transportation of the deceased
• Chapel of rest or service rooms
• Hearse to local crematorium or cemetery
• Arrangement of the funeral service at a local cemetery or crematorium
• Pallbearers
• Allowance towards third-party costs

It is worth noting that what’s included in standard funeral plans can vary and may not cover the funeral costs in full. Other funeral costs such as embalming, order of service, expensive coffins, limousines, headstones, flowers, music and catering are usually not included. They may be covered in some funeral plans at an extra cost.

How Does a Funeral Plan Work?

A funeral plan works by allowing you to prepay for funeral costs through a one-time payment or monthly instalments. Here’s how the process generally works:

1. Choose a Provider - The first step is to choose a funeral provider to make a funeral plan. Financial advisers usually offer a funeral planning service.
2. Select a Plan - Funeral plans come in various types such as basic, standard and comprehensive. You must select a type of funeral plan that fits your needs and budget.
3. Set Up The Payment - After finalising the details, the payment is set up. Funeral plans are generally paid in full or through monthly instalments.
4. Add Details - You work with the funeral provider to outline the specific details of your funeral. It involves choosing between a cremation or burial and arranging the type of service you would like.
5. Manage Funds - The money you pay into a funeral plan is either held in a trust fund or used to purchase a life insurance policy. This ensures that the funds are protected and available when needed.
6. Activate Plan - When you pass away, your family will contact the funeral provider. The funeral provider will then cooperate with the funeral director to carry out the arrangements according to your funeral plan. The money in the fund or insurance policy is used to cover the funeral costs included in the plan.

Benefits of a Funeral Plan

There are many reasons why you should consider a funeral plan, not just for yourself but also for your loved ones. Here are some benefits of having a funeral plan:

Meets Your Final Wishes - A funeral plan is tailored to meet and carry out your final wishes, from whether you decide to be cremated or buried to the type of service you wish to have. It ensures that you get the send-off you deserve.

Offers Protection - Protects your loved ones from having to cover high funeral costs, reducing financial strain after you have passed away.

Minimises Stress - Relieves your loved ones from the burden of planning a funeral and making difficult decisions during an emotionally challenging time.

Saves Money - By prepaying for funeral costs, you secure the costs at today’s price and avoid rising costs due to inflation. This can save you money in the long run.

How Long Does It Take To Arrange A Funeral?

The length of time it takes to arrange a funeral can vary on many factors including the availability of the funeral director. It can take one to two weeks to arrange a funeral. With a funeral plan in place, it can take significantly less time as most of the funeral arrangements are finalised and paid for already. Additional funeral arrangements not included in the funeral plan are organised after the person has passed away.

What Is the Average Cost of a Funeral?

Funerals are more expensive than you might think. The average cost of a funeral in 2024 ranges from £1,1511 for a direct cremation to £4,794 for a burial using a funeral director. [2] The cost of a funeral depends on the type of funeral, location and personal preferences.

How Much Does a Funeral Plan Cost?

The cost of a funeral plan varies from person to person. You can choose to pay the full amount in one lump sum or spread the cost through monthly instalments. Funeral plan payments depend on the funeral provider and type of plan, ranging from £15 to £50 per month over a specific period. Before choosing a funeral plan, it is worth seeking advice from a financial adviser.

Speak To a Financial Adviser

Given the emotions and complexities of planning a funeral, speaking to a financial adviser can be highly beneficial for those who want to be prepared for the unexpected. Here’s how a financial adviser can help:

1. Assess Your Financial Situation

   A financial adviser will evaluate your current financial situation and help you to determine the best way to fund your or a loved one’s funeral, whether that’s through a funeral plan, life insurance or other savings.

2. Give Expert Advice

   A financial adviser can offer expert advice on how to effectively plan for a funeral financially. They can recommend funeral insurance policies, will provisions or saving options.

3. Compare Funeral Plans

   A financial adviser can compare different funeral plans to find one that fits your needs and budget. They can also explain the terms and conditions, helping you understand what is covered and any potential exclusions. They may have access to financial plans at more favourable rates.

4. Provide Peace of Mind

   A financial adviser ensures that all financial planning aligns with personal wishes and legal requirements, providing peace of mind that everything is taken care of.

   As of 2022, the FCA (Financial Authority Conduct) regulates prepaid funeral plans. Before speaking to a financial adviser, make sure that they’re authorised by the FCA. Customers of an FCA-authorised adviser have access to the Financial Services Compensation Scheme (FSCS), so their money is protected if their funeral provider fails. [3] You can find an FCA-authorised financial adviser near you by visiting FinancialAdviser.co.uk. Our FCA database allows you to search over 15,000 authorised firms across the UK.