If you walked into a funeral home today to arrange a funeral, you could find the funeral director's quote is several hundred pounds more expensive than the cost of their advertised prepaid funeral plan for exactly the same service.


This article looks at how this is so,  and why your family can't simply take advantage of the potential savings by declining the at-need price list and taking out a funeral plan at the funeral arrangement appointment.

Who is this article for? 

  • Those curious about why the cost of a prepaid funeral plan is sometimes cheaper than the funeral director’s price list for the same service.
  • Someone undecided as to whether paying for a funeral early is still the wisest move.
  • Anyone wanting to know the average saving of a funeral plan vs an at-need funeral in 2021

Reading time:

 3.5 mins

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

The source of that quote is taken from the Funerals Market Investigation 2020 report (Appendix F: 5.153), written by the UK industry watchdog, the Competitions & Markets Authority (CMA). 

How can this be?" ... we hear you ask.  

To help you understand, there are a few things you need to know.
  • Funeral costs vary hugely across the UK

    In 2021, London is still the most expensive place to die, with the average cost being £5,235. This means  funerals held in England's capital cost 25.1% more than the average funeral cost elsewhere in the UK.
  • The national pricing of funeral plans covers the average funeral expense

    The great news is that if you live 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 as well as a long-term savings winner, should you decide to prepay your funeral.   
  • Funeral homes look for ways to future-proof their business

    Some funeral plan providers own their network of funeral directors.  By selling a funeral plan at a lower price than their at-need funeral, they not only secure future business for their funeral homes, but this usually generates future customer loyalty income. 

How does the cost of an average UK funeral compare with the cost of a prepaid funeral plan?

A 'basic' at-need funeral costs £4,184 (1) 
A comparable prepaid funeral plan costs £3,946  

Cost saving = £223 (5.3%

The prices above include the average funeral director's fees and necessary third-party fees for burial or cremation including the doctors’ cremation certification fees.

Why can't my family buy a funeral plan at the time of my funeral and potentially save money that way?

The simple answer comes down to a single word: LEGISLATION.

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 stipulates that a prepaid funeral plan must be for someone who is living at the time of purchase.

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". 

The Financial Services Services and Markets Act 2000.  Article 60

There is one exception to the ‘intend or expect’ rule mentioned in the legislation, and that is if the funeral plan holder dies as a result of an accident.

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

If you died within one month of taking out a funeral plan,  providing the funeral plan was taken out with a registered Funeral Planning Authority provider, then the funeral plan money you have paid in will be refunded to your Estate.   

Alternatively, your family could request that the money is used to pay the nominated funeral director’s bill.  Any balance due would need to be paid at the funeral director’s current rate.  

Terms differ between plan providers, so you should check these carefully when buying a plan, especially if there are concerns that your life expectancy could invalidate the funeral plan.

The top 5 reasons why helping your family with the funeral arrangements and costs now is so important

There’s a well-known business acronym in business 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!

Here's the detail:

Number 1

Your family won't have the ordeal of finding an affordable funeral director when they are already coping with their loss.

Once your plan is in place, the funeral director or the funeral plan company are under contract to deliver your funeral as detailed in the funeral plan.

Number 2

Your family won't feel duty-bound - or pressured - into paying more than they need to when you die. 

Often, the heart rules the head when arranging a funeral at the time of need.  Typically, bereaved families get carried away by their emotions and "want the best".  They then worry about how they are going to pay for the funeral afterwards.

Your family might also feel unduly embarrassed and pressured into buying the higher priced funeral package or coffin at the appointment with the funeral arranger.

When you prepay your funeral you can still have the best and save your family unnecessary added expense from an emotional spend.

Number 3

Your family will be saved from having to cope with the distress of a sudden and large funeral expense.

The further ahead you plan, the more your loved ones will save, as they will avoid the typical above-inflation annual funeral price increases.

Number 4

Your family won't have the added heartache so often experienced when organising a funeral.  

Sorting the funeral detail now leaves loved ones with fewer difficult decisions to make at the time of the funeral,  and removes any anxiety or guilt over whether the funeral was as you would have wanted.

Number 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.  Often, family members and close friends have opposing views about who knew you best and how you’d want your send-off to go.  This 'no win' situation can be avoided when you plan ahead.

Whichever way you look at it, there’s no mystery about why a prepaid funeral plan is the answer.

(1) The definition of a 'basic' funeral is taken from the SunLife (2021) Cost Of Dying Report. 
(2) The average price of a 'Traditional' type funeral plan is from a Funeral Planning Authority registered provider listed on Before You Go and is comparable with the SunLife 'basic' funeral definition.

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About the author 

Kim Bird

Kim, the founder of Before You Go, is a funeral cost expert and regularly appears in the press, on TV and on radio. She began campaigning for greater funeral price transparency over 10 years ago. Kim is a member of Parliamentary Groups for funerals and bereavement.

In 2017, Kim was included in the Maserati 100 & The Sunday Times list of top 100 UK entrepreneurs for having a positive impact on society and her industry.

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