Funeral Prepay Plans

Your death will be a difficult time for your loved ones – but you can help relieve some of the stress of your passing by taking on the burden of organising and financing your own funeral.

You can do this through a prepaid burial or cremation. Funeral prepay plans were introduced to the UK in the mid-1980s (but the concept dates back to Victorian times when friendly societies offered similar schemes). They are now increasingly popular in the UK, and every year 500,000 people take up the ‘pay now, die later’ option.

The average cost of being laid to rest is currently around £2,000 – and when you die it will probably be even more expensive. A prepay plan will potentially save you money by allowing you to pay today’s prices. This guarantees the cost of your funeral regardless of when you pass away and how much costs rise in the meantime.

All major funeral directors offer a variety of prepay plans to suit every person’s wallet and which allow you to pay in a lump sum, or in instalments over six, 12, 24 or 36 months. Many independent businesses also provide a similar service.

Your money will most likely be held in trust until you die, when it will pay for the services of a local funeral home.

The lowest-priced schemes include such items as a single hearse and cheap coffin, while at the costliest end you’ll get such quality features as limos for your mourners and a top-of-the-range coffin.

Some payment plans will even help cover the costs of disbursements – expenses outside of the funeral director’s remit, such as fees for doctors and clergy.

However, some companies only offer cremation, while others will expect your relatives to pay something towards the cost of a burial.

There has in the past been concern among prepay customers about the safety of their money and the legitimacy of the packages for which they are paying, which is why in 2001 the Funeral Planning Authority (FPA) was set up after the Office of Fair Trading recommended external supervision of the prepay sector.

So, before you sign up to a prepay funeral plan, you should check with the provider that it is a member of the FPA. If so, the company will be held to high standards of professional conduct, and the money you pay will be kept safe.

The FPA, which is part of the Financial Services Authority, regularly audits its members and ensures your funds are protected by being held in trust. Be aware that funeral companies do not have to be regulated by the FPA – though they must provide prepay schemes under which customers’ money is strictly safeguarded.

Always shop around before deciding upon a prepay plan. Find out if you can choose what funeral home makes your arrangements, and what would happen if you changed your mind about the scheme. Would there, for instance, be any penalty charges? Will costs include a death notice in the local newspaper?

Before you commit yourself, be absolutely sure that you will get exactly what you want. Many people enter into prepay plans to save a few hundred pounds, but most use such schemes as a way of ensuring that their funerals go smoothly and exactly how they want.