A pre-paid funeral plan lets you pay for some funeral costs such as the services of a funeral director to arrange the funeral and take care of the deceased. From 29 July 2022, all funeral plans will be regulated by the Financial Conduct Authority (FCA). If you have a pre-paid funeral plan, you can use this guide to help you understand your rights and find out if your plan is FCA authorised.
What’s in this guide
- How do I know I have a pre-paid funeral plan?
- What are the new rules?
- Check if your pre-paid funeral plan is approved by the FCA
- What to do if your provider is transferring you to a new provider
- What to do if your provider has withdrawn their application for FCA authorisation, been refused approval or has not yet applied
- What to do if your pre-paid funeral plan provider becomes insolvent
How do I know I have a pre-paid funeral plan?
Funeral plans cover the specific costs of arranging and paying for either a burial or a cremation. You may have taken one out because you don’t want your loved ones to worry about managing and paying for a funeral at such a difficult time.
You will already have paid for some of it in advance, either through a lump sum or instalments.
But even the best plans won’t cover all the costs and there’s a risk that your relatives or friends may need to find extra money on top of what the plan pays out.
Until now, these plans have not been regulated by the FCA, so you may not have been given enough information to make the best decision for your needs when you took your plan out. Also, if something went wrong, making an effective complaint would have been more difficult.
But this is changing. From 29 July 2022, new rules mean your provider must register their plans with the FCA and apply for authorisation.
If the plan is authorised by the FCA, this will give you greater protection, but it could affect your existing plan if your provider chooses not to register, or the plan isn’t accepted.
What are the new rules?
From 29 July 2022, if you have a pre-paid funeral plan, your provider must be registered with the FCA and authorised to administer your plan or stop trading and transfer your plan to another provider.
All providers who continue to provide a funeral plan service after 29 July 2022 must follow certain rules which include making sure your money is looked after and used responsibly.
You’ll also have the right to:
- Complain to the Financial Ombudsman Service (FOS)Opens in a new window, if you’re not happy with the way you have been treated. It’s a free and easy to use service that resolves disputes fairly and impartially and has the power to put things right.
- Have access to the financial protection offered by the Financial Services Compensation Scheme (the FSCS)Opens in a new window. This means if the funeral provider goes bust, you’ll be able to claim compensation for your financial loss.
- Get the service you paid for. For example, funeral instalment plan products will always deliver a funeral as the FCA will be banning those that don’t guarantee this.
Any providers not authorised by the FCA from 29 July 2022 will have to stop trading and must transfer their existing plans to other providers or should wind down their business in an orderly way.
After this date, it will be a criminal offence for providers to carry out funeral plan contracts without authorisation.
Check if your pre-paid funeral plan is approved by the FCA
All providers have until 29 July 2022 to register their plans with the FCA and get it approved.
Many providers are in the process of complying with the new regulations.
But some providers may choose not to seek FCA approval, while others will register but fail to meet the standards needed to carry on offering the plans.
You can find out your provider’s current application statusOpens in a new window by searching for them on the FCA website.
Want to know what your provider's application status means for you, if you have a plan?Opens in a new window Check out the table and advice from the FCA.
Got questions for your pre-paid funeral provider?Opens in a new window find their contact details on the FCA website.
What to do if your provider is transferring you to a new provider
Remember
If you’ve taken out a pre-paid funeral plan, keep the paperwork in a safe place and make sure your next of kin know about so they know the plan exists and the type of funeral you want.
Many providers who are not applying for authorisation will be transferring their existing plans to a new one that will take over the administration. As part of this, the overall cost will not change and the money you have paid will be safeguarded.
Providers will ask for your consent for your funeral plan to be transferred. If you don’t give your consent, they may not be able to continue with your plan and you’ll be entitled to a refund. If you don’t respond to their communication or reply to give your consent before the deadline given to you, you may be automatically transferred to an authorised provider. So it’s important to make sure you’re aware of what is happening.
If you want someone to help you work through any letters you’ve been sent, contact your provider so that they can go through this with you.
You can find a list of firms transferring their plans to another providerOpens in a new window on the FCA website.
What to do if your provider has withdrawn their application for FCA authorisation, been refused approval or has not yet applied
Be aware
From 29 July 2022, funeral plan providers will not be allowed to sell products or services they know cannot be delivered.
If you have a pre-paid funeral plan and your provider hasn’t applied for authorisation yet, or isn’t going to apply for authorisation, they should contact you to tell you what’s happening with your plan.
If you haven’t heard from your provider, get in touch with them as soon as possible. You can find your provider’s contact details on the FCA websiteOpens in a new window
Questions you might want to ask your provider
Find out what’s happening with your pre-paid funeral plan with the following questions:
- What are my options? Can you send these to me in writing?
- When can I expect to hear more from you?
- Will you still be able to deliver on my funeral plan?
You can ask for your plan to be cancelled and request a refund of any money paid into the plan. But be aware, there may be a cancellation fee, so it’s important to check the terms and conditions of your contract.
Watch out
Beware of fraudsters pretending to be from firms authorised by the FCA, as they could be 'clone firms'. If you're cold-called by a financial services firm, always ring them back on the number given on the FCA Register.
Find out more about protecting yourself from cold calls and scams in our guide Types of scam
Unfortunately, because the plans haven’t been approved by the FCA, you won’t be able to complain to the Financial Ombudsman Service (FOS) or claim compensation through the Financial Services Compensation Scheme (FSCS).
There are many ways to plan and pay for your funeral, for a list of your options to help you decide what’s best for you read our guide Over 50s life insurance – is it worth it?
What to do if your pre-paid funeral plan provider becomes insolvent
You will be transferred to a new provider which may offer you a replacement plan for an additional cost or it may be on different terms and conditions.
You have the right to reject the new offer and receive some money back from the insolvency, but it is likely to be less than the original amount you paid for your funeral plan.