A quick guide to funeral plans

In moments of quiet reflection, many people sit down and think about the arrangements they would like to be made when the time eventually comes for their funeral. Many personal preferences and decisions are likely to be involved, so it is a natural concern to wonder how those final wishes might be realised.

A funeral plan may provide just the answer – not only by putting on the record every last detail of the ceremony you want to be conducted, but also by paying for it in advance, so that you may help to avoid the almost inevitable increase in funeral costs in the years to come. A report by the BBC, for instance, suggests that these costs are currently increasing at around four times the rate of inflation.

How does a funeral plan work?

Quite simply, funeral plans allow you to describe exactly how you want your funeral to be conducted – from the form of service, to the funeral director to conduct proceedings and even such details as the flowers and composition of the cortege.

You might choose to take a step further by paying your funeral director in advance – so that you know none of the difficult decisions about raising the necessary funds are left to your family, loved ones and friends. By paying in advance you might also help to guard against the inevitable effects of inflation and the increased cost of funerals when the time eventually comes around.

That is all very well, you may worry, but what if your chosen funeral director becomes insolvent and is no longer in business when the time comes –there is a risk that the payment you made in advance may be lost.

Prepaid funeral plans

National providers of funeral plans, therefore, offer the reassurance and confidence of protecting the funds you have prepaid. If your nominated firm of funeral directors is no longer in business when the arrangements need to be made, your money is still made available to an alternative firm in your neighbourhood.

The providers do so by ensuring that the money you have paid is securely held in a trust fund or is invested in an insurance policy which matures upon your death.

These arrangements are authorised and regulated by the Financial Conduct Authority (FCA) and, so, says the Consumers’ Association’s Which? magazine, safeguards your funds and makes sure that they remain available when the time comes.

This formal protection is further backed up by the industry’s self-regulator, the Funeral Planning Authority (FPA), whose members are bound by a code of practice designed to give further security to consumers’ interests.

Thus, in the event of a registered provider going out of business, other members are bound to make every effort to ensure that the prepaid services are delivered by an alternative member or that other ways are found to satisfy the consumer’s rights.

The FPA also operates a conciliation service in the event of a complaint against a registered provider. The latter is bound to comply with any findings made by the disputes resolution scheme – although the consumer, of course, is bound by no such limitation.