Setting high standards for pre-paid funeral plans

In 2019, the Government decided to bring pre-paid funeral plans under our regulation. Our rules help make sure that authorised firms don't operate in ways that cause harm. 

A pre-paid funeral plan allows customers to pay upfront or in instalments for a funeral, which may help relieve the financial burden on family when a loved one dies.

The Government excluded most of the funeral plan sector from regulation in the early 2000s. But, since then, it has grown significantly. 216,000 plans were sold in 2021, roughly double the number sold in 2010.

Concerns about funeral plan providers 

There were increasing concerns about the conduct of some pre-paid funeral plan providers. In response, the Government decided to bring the sector under our regulation. 

We conducted research that identified several potential harms. These included firms: 

  • selling poor value-for-money products
  • using high-pressure sales tactics
  • charging high commission
  • not being clear on product exclusions
  • managing financial trusts poorly 
A man and woman smile at each other while holding an iPad

Setting high standards for providers

We developed rules to help make sure that authorised firms don't operate in ways that cause harm. The rules set high standards for sales, including a ban on commission payments, and state that products must deliver fair value.

They also reinforce the existing requirements for customers’ money to be backed by adequate trust or insurance arrangements.

We put in place a strong application process, to make sure that only firms that meet our standards are authorised. Several firms didn’t apply for authorisation and others withdrew their applications. We’re working with the industry and Government to develop solutions to minimise the impact on affected customers of these firms.

What this means for funeral plan customers

When we started regulating the sector on 29 July 2022, 26 funeral plan providers had been authorised.

Customers are now able to choose from a large range of providers and products. They’re protected by the Financial Services Compensation Scheme (FSCS) if their provider fails, and they also have access to the Financial Ombudsman Service if they have a complaint.

If you have a pre-paid funeral plan, find out how to check whether your provider is authorised, and what you should do if it isn't.

Page updates

01/08/2022: Editorial amendment Update to language now firms are authorised.
29/07/2022: Information changed Number of firms we're authorising following regulation on 29 July.