All, Funeral planning

Why is the price of a prepaid funeral plan sometimes cheaper than the funeral director’s standard price list – for the same service?

If you haven’t prepaid your funeral before you die, your family may discover, when they make the arrangements, that the purchase price of a funeral plan would work out cheaper than the funeral director's standard ‘at-need’ funeral price list – for exactly the same service. Alas, too late for all concerned.

We explain how that’s the case, and – knowing that – why you or your family can’t simply take advantage of the saving by purchasing your funeral plan in the days immediately before and at the funeral arrangement. Even so, once you understand how the system works, prepaid is still money saved.

Who is this guide for? 

  • Anyone curious about why the cost of a prepaid funeral plan is sometimes cheaper than the funeral director’s price list for the same service
  • Anyone wanting to know the average saving of a funeral plan vs an at-need funeral in 2020 
  • Anyone wanting to know why planning a funeral early is still the wisest move

Reading time:

 3.5 mins


Why can the purchase price of a prepaid funeral plan, around the time of the funeral, sometimes be cheaper than the at-need cost for the same standard of funeral? 

Before we answer that, here’s the source of our information, so you know it’s credible: 

Competition & Markets Authority (CMA): Funerals Market Investigation 2020. Appendix F: 5.153  

"[Prepaid funeral plans] are often sold at a lower price than at-need funerals."

Now, in order to solve this riddle, we need to look at some numbers.  Don’t worry, we’ll take it slowly! 

Here are the most common scenarios: 

  • Funeral costs vary hugely across the UK.  In 2020, London is still the most expensive place to die.  At an average cost of £5,693, a funeral held in England's capital costs 35% more than the average cost of a funeral elsewhere in the UK.  
  • What you need to understand is that the pricing of national funeral plans covers the average funeral expense – regardless of where you live.  If you reside in an area where funeral prices are high, and London is far from being the only pricing hotspot in the UK, you could be on to an immediate and long-term savings winner should you decide to prepay your funeral.   
  • Here’s how the average UK funeral cost compares with the average of a funeral plan (in 2020):
    A basic funeral = £4,417 (1)
    A comparable basic prepaid funeral plan = £3,961 (2)
    Cost saving = £456 (10%)
    Price includes the average funeral director's fees and necessary third-party fees for burial or cremation (including the two doctors’ cremation certification fees).
    Sources: 
    (1) 'Basic' funeral as defined and referenced in the 2020 SunLife Cost of Dying Research report. 
    (2) The average price of a 'Traditional' type funeral plan (comparable with the SunLife 'Basic' definition), from a Funeral Planning Authority registered provider listed on Before You Go).
Some funeral plan providers own their network of funeral directors.  This may enable them to provide funeral plans at a lower price than at-need funerals because selling a prepaid funeral plan can secure future business for their funeral homes, and generate future customer loyalty. 
"Now that I know all this, why doesn't my family just buy a funeral plan at the time my funeral is needed instead of paying in advance?"
That is the big question, and the simple answer comes down to a single word: legislation. 


The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 stipulates thatin regard to prepaid funeral plans:  

The person for whom the funeral is for, needs to be living at the date when the contract is entered into” and a funeral contract cannot be entered into if "at the time of entering the contract, the customer and the funeral plan provider intend or expect the funeral to occur within one month". 
There is one exception to the ‘intend’ or ‘expect’ rule, and that is if you died as a result of an accident.

So what does happen if I take out a funeral plan and then need my funeral within one month, but my death was not due to an accident? 

In that unhappy event, if your funeral plan was with a Funeral Planning Authority registered provider, the funeral plan money you have paid in will be refunded to your estate or your family could request that it is used to pay, or go towards, the nominated funeral director’s bill. Any balance due would need to be paid according to the funeral director’s standard price list.

Terms differ between providers. You should check these carefully when buying a plan, and especially if there are concerns that your life expectancy could invalidate the plan in the manner described above.

How you can help your family with the funeral arrangements and cost from beyond the grave?

There’s a well-known business acronym called the Five Ps: proper planning prevents poor performance. We have our own version that perfectly sums up our message to you: prepaid planning prevents posthumous poverty. pre-posthumous planning prevents payment poverty!

Let’s break that down a little to illustrate why prepaying and planning your funeral in advance is so important for those you leave behind.

  1. 1

    Your family won't feel pressured into paying more than they need to, when you die.  

    Arranging the funeral is often when the heart rules the head.  Typically, bereaved families "want the best" and then they worry about how they are going to pay for it afterwards.  If you've already paid for your funeral, you can still have the best and save your family unnecessary added expense.  
  2. 2
    Your family won't have to spend time shopping around for the best-value funeral.  
    Once your plan is in place, the funeral director or the funeral plan company itself has been nominated to carry out your funeral and is under contract to deliver it for the fixed amount agreed on the day the plan was purchased.  Your family won’t have the distress of hunting for a good deal at a time when they are already coping with their loss. 
  3. 3
    Your family will be saved from the expense of your funeral.
    The further in advance you plan, the more loved ones will save, as they will be avoiding the increases in funeral costs in the intervening years (see Rise in funeral costs). And, depending on your preferred payment plan, your funeral will all be covered by then. It’s something else they’ll remember you fondly for.
  4. 4
    Your family won't have the heartache frequently experienced when organising a funeral. 
    You will have sorted out the details, leaving them with fewer or possibly no decisions to make, which eliminates any worries about whether they've done right by you. 
  5. 5
    You will help your family avoid possible arguments and conflict. 
    Documenting what you want for your funeral gives loved ones clarity over the details.  Grief affects different people in different ways, but it always takes its toll.  Family members and close friends may have opposing views about who knew you best and how you’d want your funeral to go (and what should happen afterwards).  It is a no-win situation that can cause upset and division, which is the last thing you’d want as your legacy.   Documenting what you want, whether it’s in black and white, or on an audio / video recordingor giving named individuals your express permission to make those choices, removes any uncertainty. 
Whichever way you look at it, there’s no mystery about why a prepaid funeral plan is the answer! 
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All, Funeral planning

Does a funeral plan allow me to choose the funeral director?

When you buy a funeral plan, either the funeral plan provider will nominate the funeral director, or you will be offered a choice.

We outline the options and what you can do about switching to another funeral director.

Who is this guide for? 

  • Anyone who has a preferred funeral director that they would like to deliver their funeral 
  • Anyone who might want to change the funeral director if they aren't happy with the plan provider's choice
  • Anyone who wants to understand why going to a preferred funeral director to buy their funeral plan may not be the smartest move

Reading time:

 8.5 mins


Can I always choose which funeral director will deliver my funeral?

The option to choose your funeral director depends on the plan you buy and whether your preferred funeral director is included within the funeral plan provider's network. 

Here are the most common scenarios: 

  • The plan provider lets you choose from a shortlist of funeral directors.  
  • The plan provider leaves the choice of funeral director entirely up to you.
  • The plan provider will choose the funeral director.

Can I choose a funeral director who is outside the funeral plan provider's network?

If the funeral director you want is outside the funeral plan provider's network, the funeral plan provider will sometimes approach your preferred funeral director to see if they will take on the plan. Your preferred funeral director's willingness to accept the plan will depend on the terms of the funeral plan you want to buy and the following:
  • Supplementary cost  - The funeral director may require a top-up fee from you. This will be added to the funeral plan price.
  • Commercial restrictions  - The funeral director may have a contract with another plan provider that means they are unable to accept a different provider's plans.

Why might I want to choose the funeral director?

You may be comforted by the fact that you will be cared for by a funeral director you've used before or one who has been recommended by someone you trust.
If getting your preferred funeral director means that you have to sacrifice the funeral plan you want and select a different plan, be aware that by the time your funeral is needed the funeral director may have retired, the funeral home may have changed hands, or you may have moved some distance away so you wouldn't have the services of your preferred funeral director anyway. Rest assured, a funeral plan provider chooses the funeral directors in their network carefully. The plan provider's reputation depends upon it.

Can I change the funeral director that's been appointed by the plan provider? 

If you're not keen on the funeral director that has already been appointed or those funeral directors on the shortlist, it may be possible to choose another one.  Check the terms of your plan.  If you're still not happy with your options, you could cancel your plan.  Providing you do this in writing within the cancellation period (of up to 30 days), you will get a 100% refund.  

At face value, this seems like the obvious and easiest way to purchase your plan.  However, there are a couple of things you should bear in mind: 

  • Not every funeral director sells funeral plans.  
  • Some funeral directors only offer one plan provider's range of funeral plans.  (Funeral directors may be commercially restricted from selling other providers' plans.)  This limits your choices and could mean missing out on getting the best value plan for your needs. 
Some advice if you do decide to go directly to the funeral director 
  • Make sure that the plan the funeral director is selling is from a Funeral Planning Authority registered (FPA) provider. Registration is voluntary and gives you the reassurance that the plan provider is complying with the FPA's strict rules around the security of plan funds, beyond the exemption rules set by the Financial Conduct Authority. Being a registered member also demonstrates that the plan provider is operating above the basic required professional standards.
  • Ask the funeral director what would happen to your plan if you moved out of the area, or the funeral director retired, or the funeral director went out of business.
  • When buying your funeral plan, make sure your conversation with the funeral director is confirmed in writing or that your call is recorded and that you can receive a copy if requested.  Should you or your family have an issue with the funeral plan you have been sold, or you believe you haven't been treated fairly, you will have the documentation or a recording to support your case.  You can raise a complaint with the FPA - providing the plan you are buying is from an FPA registered member, of course.
  • For your added protection, make sure the funeral director is a member of a funeral trade association. There are two: The National Association of Funeral Directors (NAFD) and the Society of Allied and Independent Funeral Directors (SAIF). If your family should have a complaint about the funeral director's services, they can seek official redress through one of these organisations.
  • Before you buy from the funeral director, shop around to ensure you are getting the best plan at the right price. You can do that in person or by using an online portal such as ours.
Choosing a prepaid funeral plan gives you the final say over your final journey.  Finding the right funeral director is an important part of that process.  Selecting a funeral director included in the plan provider's network takes the worry and hassle away from finding the right one.  At Before You Go, we help you make informed decisions about every aspect of your funeral and help you find the funeral plan that's right for you.  Leave great memories, not loose ends. 
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