Updated:  06 June 2022

The Funeral Planning Authority (FPA) currently regulates the funeral plan industry.  On 29 July 2022, the FPA will be handing over this responsibility to the Financial Conduct Authority (FCA).

This article gives an overview of what the new regulation will mean for you, and if you should be concerned about the fact that you have already bought a funeral plan or are thinking of buying a funeral plan before the handover to the FCA in July 2022.

Who is this guide for? 

  • Anyone wanting to know what the new Financial Conduct Authority (FCA) regulatory rules will cover.
  • Anyone wanting to know what assurances are in place if you buy a funeral plan before the new regulation comes into force in July 2022.
  • Anyone wanting top tips for buying a funeral plan now, wisely.

Reading time:

 5 mins

The Financial Conduct Authority's view on funeral plans

“Sold well, these can be valuable products that support consumers and their families at a difficult time in their lives.”

Financial Conduct Authority - Funeral Plans:  Proposed approach to regulation.  
Consultation Paper CP21/4 - March 2021

What if you want to buy a funeral plan in the weeks prior to regulation?

Some consumers may take the view to wait until 29 July 2022.  Sadly, some people don’t have the luxury of time and would like to put a funeral plan in place now.  

If that applies to you,  you should be aware that if you enter a contract within one month of knowing that you expect to die within that time, the benefit of the funeral plan will not be provided.  Depending on the funeral plan provider, the money will be refunded or used to pay towards a funeral "off plan".

RAO Article 59 (b): the provider undertakes to provide, or secure that another person provides, a funeral in the United Kingdom for the customer (or some other person who is living at the date when the contract is entered into) on his death;

unless, at the time of entering into the contract, the customer and the provider intend or expect the funeral to occur within one month.

Broadly these are the facts:

  • FCA rules will apply retrospectively to all funeral plans (aka "subsisting" funeral plans) purchased before July 2022 -  except in relation to complaints.  In this instance, funeral plan holders will only have access rights to the Financial Ombudsman Service (FOS), if the plan provider was an FPA registered provider at the time of the event causing the complaint.
  • FPA rules apply now, and as its website explains:  "all providers registered will adhere to a strict set of Rules and a Code of Practice". 

Quick 'back to basics':  What is a prepaid funeral plan?

A funeral plan allows you to organise your funeral (or someone else’s) and pay for it at today's prices.  

This gives you peace of mind that everything is sorted and that your loved ones are saved from a sudden and considerable  expense (the current average cost is £4,184*).  Prepaying also ensures loved ones are protected from significant increases in the price of funerals in the time between buying the plan and the point of need.  

A surprising fact about funeral plans is that they are often sold cheaper than at-need funeral plans! (To learn more, read this article).

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

Source:  Competition & Markets Authority (CMA) – Funerals Market Investigation 2020 Provisional Decision Report Appendix F: 5.153

How do funeral plans work currently?

  • The cost of your funeral (as outlined in the plan) is fixed on the day you buy.
  • The funeral plan provider safeguards your funeral money according to the regulatory framework: The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, Articles 59 & 60.
  • For funeral plan providers to comply with the RAO's exemption rules, all funeral plan monies must be held in a trust (which is independent of the funeral plan company) or used to buy a whole of life insurance policy on the life of the plan holder.  Note:  the insurance policy does not pay out a lump sum.  A sum is paid direct to the funeral provider who is contracted to deliver the funeral service detailed in the plan.
  • The money to pay for the funeral is released to the funeral director when the funeral is needed.

For more information on how a funeral plan works, click here.

What’s included in the FCA's new proposed funeral plan regulation?

The new proposed approach to funeral plan regulation is about ensuring:

  • All funeral plans are designed, marketed and sold to the same enforceable conduct standards.
  • Sufficient financial arrangements are in place to meet the contractual liabilities (be that through insurance or trust structures).  The FCA confirms in its Consultation Paper CP21/4 (March 2021) that all funeral plan providers currently safeguard consumer’s money in this way. 
  • Consumers are treated fairly.
  • Consumers have access to the Financial Ombudsman Service (FOS).

The FCA recognises that with regard to the proposed new regulation

“many well-run firms will already be meeting these standards; or be very close to them”. 
Source:  Financial Conduct Authority - Funeral Plans:  Proposed approach to regulation.  
Consultation Paper CP21/4 - March 2021 (1.7)

Which funeral plan companies will be authorised by the FCA?

For the most up to date information on which funeral plan companies the Financial Conduct Authority intends to authorise (or not), visit the FCA's website page here and look at the status column.

As you may not immediately recognise the funeral plan brand name you have bought or may be about to buy on the FCA's website,  here's a short list of the brand names and the companies that operate them.

Funeral plan brand name

Operated by ("Firm")


Alternative Planning Company Limited

Perfect Choice

Ecclesiastical Planning Services Limited

Simplicity Cremation

Dignity Funeral Limited

What are the pros and cons of waiting until the new regulation comes into force in July 2022 to buy a funeral plan?

If you would prefer to hang on until 29 July 2022, as well as being assured that all funeral plan providers follow the FCA’s proposed standards as mentioned above - which, importantly, the FCA recognises that many funeral plan providers already do - here's  how else you will benefit:

  • The Pros of purchasing a funeral plan after regulation on 29 July 2022
  • Alignment of funeral plan products' terms
  • Should you die within the first two years of buying your funeral plan on a repayment basis, providing you have kept up with the repayments the cost of your funeral will be covered and without any hidden costs.  Where there are costs, they need to be proportionate.  
  • It's worth noting that some plan providers already offer funeral plans that cover the cost of your funeral if you die after 12 or 24 months, providing you have kept up with the repayments.
  • Nomination of funeral director at the point of sale
  • Again, it's worth noting that the Funeral Planning Authority already insists that a named funeral director is appointed when taking out a funeral plan.
  • Regular funeral plan statements
  • The purpose of introducing annual statements is to reduce the scope for plans to be overlooked or for there to be confusion about the terms of the funeral plan.
  • Ban on cold-calling
  • Hoorah!
  • The Cons of purchasing a funeral plan after regulation on 29 July 2022
  • Regulation is likely to push up funeral plan prices
  • The FCA has admitted on a webinar given to all stakeholders that the impact of the new regulatory infrastructure and standards means funeral plan prices are highly likely to increase.  
  • Ban on commission payments will push up plan prices if you want independent advice
  • On the face of it a ban on commission payments seems a great idea.  Currently, the funeral plan companies build in the commission they pay out to third parties in the funeral plan price.  This commission payment does not impact the funeral to be delivered:  a funeral plan is a contract, which is delivered either by the funeral plan company that sold the plan or by a funeral director, and said contract guarantees to deliver the service as outlined in the plan document at the agreed price. 
  • The fact that funeral plan providers will no longer pay their third party marketing agents to market and sell  funeral plans on their behalf, doesn't mean that plan providers must or will reduce the cost of their funeral plan products.  Funeral plan providers will still need to cover the cost of marketing and sales to reach their customers, as well as the new FCA compliance fees.
  • The ban on commission payments also means that if you want independent impartial advice on the best funeral plan to buy, you're going to have to pay for it.  This fee will be on top of the cost of the funeral plan which the FCA agrees could be higher because of the additional regulatory costs.  This advice fee is likely to be several hundred pounds in order to make it worth while for any advisor to cover the time and skill involved in competently comparing all the products on the market.  (An independent advisor may include the cost of the advice in e.g. a financial advisory package.)
  • You will need to factor in funeral plan price increases 
  • As mentioned, a funeral plan locks in the cost of your funeral on the day you buy.  Any delay means you will need to factor in the expected rise in funeral costs. Funeral plan prices have risen 128% since tracking began in 2004.  All but two years saw a rise well above inflation.*  (By way of comparison, according to Statista full-time wages have risen 42.6% in the same period.)
  • Reduced competition and choices
  • As the new regulatory infrastructure and standards are costly to participants, it's likely there will be a significant reduction in market participants. This will, of course, benefit the large vertically integrated funeral director/funeral plan business, and will be to the detriment of the consumer who will have less choice in both funeral plan products and choice in the funeral director who delivers the funeral plan.
  • It's June 2022, and you can now see the impact of the regulation from the number of companies who are not intending to apply, but are planning to transfer their book of existing funeral plans.  https://www.fca.org.uk/consumers/funeral-plans/providers-list

Why should I buy my funeral plan ahead of the new regulation?

  • Immediate peace of mind
    You and your loved ones will have immediate peace of mind because everything’s sorted.  
  • Cost-saving
    The FCA has admitted that the cost of a funeral plan is highly likely to increase. And if you want independent and impartial advice, you're going to have to pay for it.  
  • FCA rules will apply retrospectively
  • You will be pleased to learn that the FCA Handbook of rules will apply retrospectively for ("subsisting") funeral plans purchased before 29 July 2022.  However, access to the Financial Ombudsman Service from July 2022 will only be for funeral plans purchased from an FPA registered provider that was registered with the FPA at the time of the event causing the complaint.

“A funeral plan provider must ensure that, in relation to its subsisting funeral plans, there are adequate product governance arrangements in place, containing appropriate measures and procedures, to ensure a subsisting funeral plan is carried out in a way that complies with the firm’s regulatory obligations under the FCA Handbook.”

Financial Conduct Authority - Funeral Plans:  Proposed approach to regulation.  
Consultation Paper CP21/4 - March 2021 (7.4.2. )

Top 4 tips on how to buy a funeral plan wisely before the new regulation is introduced on 29 July 2022

If you want to buy a funeral plan ahead of the new funeral plan regulation taking effect, here are four things you can do now to ensure you buy wisely.

Make sure you choose a trusted funeral plan provider.

  • Ensure that the funeral plan you buy is from a funeral plan provider registered with the Funeral Planning Authority (FPA).
  • The FPA will continue to monitor funeral plan providers until the new FCA regulation comes into force.
  • Ensure the plan provider's application to become directly authorised with the Financial Conduct Authority (FCA) has not been refused.  Check here.
  • If you purchase your funeral plan through a funeral director, ask the following
  • Will your conversation be recorded?  
  • You'll want some assurance there is evidence to support any claim, should you need it.  If the funeral director replies that the conversation is not recorded, advise the funeral director you will be recording the conversation on your mobile phone or that you will be taking notes in front of a witness.
  • How many funeral plan companies does the funeral director market on behalf of? 
  • If the answer is that they sell their own funeral plan, ask for the name of the company behind it.  
  • Some funeral directors are commercially bound only to sell funeral plans from one funeral plan provider.   So be aware there may be a more suitable plan from a competitor. Shop around!
  • Does the recommended funeral plan guarantee or pay a contribution towards the following third-party fees?  (1) cremation or burial, (2)  officiant's fee (3) doctors' fees (for cremation plans only).  
  • If the doctors' fees are included but aren't needed, it is unlikely that this fee will be reimbursed.  Doctors' fees aren't payable if the death is in Scotland or if it was sudden and referred to the coroner). 
  • How many days will you have to cancel your funeral plan for a no-quibble 100% refund, if, for instance, you change your mind?
  • It's usually between 28 and 30 days. Should you buy a plan, put the purchase date in your diary as a reminder, otherwise there is likely to be a cancellation fee.
  • Will the funeral director be putting their reasons for recommending the funeral plan in writing?
  • Insist that they do.
  • DO NOT pay for your funeral plan in cash!
  • If possible, pay for your funeral plan by credit card directly to the FPA-registered funeral plan provider, who is required to put the money to pay for your funeral in to a trust or whole of life policy immediately.  Should something go wrong, you may be able claim a refund from the credit card company.
Don't pay for your funeral plan in cash

Alternative ways to sort your funeral affairs now

If you still want to postpone buying a funeral plan,  here are some ways you can put your funeral affairs in order now.

Consider setting money aside in a savings account, an Over 50s policy or life insurance.

Bear in mind a funeral plan is the only way for you to ensure the funeral director’s costs are covered no matter how much prices may rise.  

A funeral plan also saves loved ones from a possible 'emotional overspend'.  When a funeral isn't prepaid, it’s all too easy for loved ones to let their hearts rule their heads at the funeral arrangement and “want the best”, then end up worrying about how they are going to pay for it.

Let loved ones know what your funeral preferences are, and put them in writing. 

Our free Funeral Wishes Planner is a simple and highly effective way to pass on the detail of your send-off.  You funeral wishes stops loved ones from worrying about the type of funeral you would have wanted and from a potential emotional over-spend.  Our planner comes with a series of free supporting guides on your funeral options.

Download-Funeral Wishes Planner

FREE Funeral Wishes Planner

Leave great memories, not loose ends.

Get the send-off you want and help  loved ones avoid making decisions at an already difficult time.  Leave clear instructions in this free Funeral Wishes Planner.

It's the perfect companion document for your Will and funeral plan if you have one.

* Source:  SunLife (2021) Cost Of Dying Report 

Get your FREE 
Funeral Wishes Planner

(No funeral plan purchase necessary)

Don't leave loved ones to worry about the detail of your funeral.  Leave clear instructions in this FREEand simple 
Funeral Wishes Planner

Haven't got a printer?  Send an S.A.E. to Before You Go.  Click for address.

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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