Skip to content

Over-65s concerned at lack of regulation of funeral plan industry

| Financial services

  • Four out of five (79%) have concerns about the Funeral Plan market not being regulated by the Financial Conduct Authority (FCA)
  • Clear market for funeral plans as they provide one less worry for families (70%)
  • A third (32%) have concerns about how secure their invested funds would be

While half (50%) of over-65s would consider taking out a pre-paid funeral plan, new research from Age Co Funeral Plans has found that four in five (79%) of older people are concerned that the funeral plan market is unregulated and does not fall within the scope of the Financial Conduct Authority. This makes this market something of a 'free for all' at present, which can be unhelpful for prospective customers.

Many older people appreciate that having a plan in place would provide one less worry for their family (70%) as well as providing older people with the benefit in paying for their funeral at today’s prices (53%).

However, many older people have concerns with funeral plans that regulation could help with. For example, one third (32%) of the over-65s surveyed have concerns about the money they invest in a funeral plan being secure, while a quarter (25%) said they don’t trust funeral plan providers.*

Concerned couple

Doug Strachan of Age Co Funeral Plans, said: “We support the views of older people in the concerns they have of the funeral plan market. We compete in the market and are aware of some unscrupulous practices being adopted by unregulated firms.** We are glad that the Government is looking at what regulation to adopt and our preference would be to see the Financial Conduct Authority (FCA) take regulatory responsibility. In the meantime, it’s essential that people can have confidence that their plan will deliver when they need it and that’s why we’ve ensured that the money people invest in an Age Co Funeral Plan is protected in a secure ring-fenced trust fund.

“There are many different providers and plans out there offering varying levels of service and quality so shopping around and asking questions is crucial before making your own informed choice. We strongly recommend taking your time to ensure you choose a provider who can guarantee your hard-earned funds will be looked after responsibly.”

Five things to keep in mind if you’re considering purchasing a pre-paid funeral plan:

1. A funeral plan is not an investment product. A funeral plan enables you to pay for a service in advance. It is not an investment product that would seek to return on investment.

2. No two funeral plans are the same. Most providers will offer different levels of plan offering various levels of service and costs. However, very few funeral plan providers will offer exactly the same package as another provider so it is very important to ensure that you are sure that the chosen package contains everything you would like.

3. A funeral plan does not cover every cost. No pre-paid funeral plan can fully account for all the likely costs that will be required at a funeral. For example, no pre-paid plan will be able to fully cover the cost of a burial plot as these costs vary widely across the country. If your intention is to be cremated, then make sure that the plan you choose covers these fees. Other fees that could be affected include the church service fees or the use of a limousine. The important thing to do is check what is included in the funeral plan before you buy and for those costs that are not fully covered, check what level of contribution will be made to those costs by the plan and whether they rise with inflation.

4. There are other options. You may wish to consider other options for funding a funeral such as leaving enough money in a savings account or other investment to cover the cost of your funeral. However, it’s important to bear in mind that the amount paid in may not be enough to cover the funeral in full as costs rise. There are also ‘over 50s’ policies available but again these are unlikely to increase enough over time to meet the costs needed. You may find that with these the amount available doesn't go very far towards costs, or that there are "obstacles" in the policy, such as not paying out until you have made a certain number of monthly payments.

5. Be careful who you buy a funeral plan from. It is important to make sure that your money is safe. The Financial Conduct Authority (FCA) does not regulate funeral plans. Therefore it is important to check that the funeral plan provider is a member of the Funeral Planning Authority (FPA) who as part of their Code of Conduct offer some protection to customers. It may be worthwhile also asking the funeral plan provider whether the Trust Fund for the plan is protected, by ensuring that it is independently managed. You can find out more about the Age Co Funeral Plan Secure Trust Fund here.

Doug’s industry insights:

  • The majority of funeral plans will not include headstones, memorials or burial plots, although some will make contributions to these. Make sure you are clear about what is and is not included before you buy your plan and what contributions will be made if some costs are not fully covered.
  • Funeral plans can be paid by either a one-off payment or in instalments over 12 to 120 months. It’s important to remember that paying in instalments could cost more because of administration fees and interest. Also be aware that if you are paying in instalments and a claim is made before you’ve finished, some providers will simply ask for the outstanding amount to be met from your estate. This is important to check as some may cancel the funeral plan altogether.
  • While most plans will freeze costs at today’s prices, it is worth noting that no two funeral plans are the same so check the guarantee on what is included to avoid your family having any unexpected costs.

*The Age Co research was commissioned from One Poll on behalf of Age UK Enterprises for Age Co Funeral Plans. Total sample size of 2,000 UK adults aged 65-85. Fieldwork was undertaken 08/10/2018 – 19/10/2018.


Back to top