CP21/4: Funeral plans: proposed approach to regulation

Open consultation
Consultation closed

We are consulting on draft rules and guidance for the funeral plans sector. We are proposing standards that firms will need to meet when the sector moves into our regulation.


Read CP21/4

Why we are consulting

Funeral plans are products under which a consumer pre-arranges and pre-pays for their funeral with a provider, generally for a fixed cost. The funeral plan could be sold by a third-party intermediary or directly by the provider firm.

From 29 July 2022, activities involving the provision and distribution of pre-paid funeral plans will come under our regulation, and firms conducting these activities will need to be authorised by us.

Our proposed rules are intended to protect consumers that have, or will in future take out, a pre-paid funeral plan product. We want to see an improvement in outcomes for consumers in this sector, with better value products, better sales practices, and better controls in place so consumers can be confident they will receive the funeral they have agreed. Our proposed rules will also set a level playing field for firms – all firms who want to carry on this business after July 2022 will need to meet the same standards.

Who this applies to

This consultation will interest:

  • firms that sell or carry out funeral plan contracts for funerals in the UK
  • investment advisers who provide advice on funeral plan contracts 
  • insurance firms who provide life insurance policies that back some funeral plans
  • trustees of trusts and discretionary investment managers which manage the assets of trusts that back some funeral plans
  • trade bodies representing firms that carry out or sell funeral plan contracts, including those representing funeral directors
  • groups representing consumer interests
  • consumers that have a funeral plan, or are thinking of purchasing one

What this means for firms

All firms will need to be authorised by 29 July 2022 to continue carrying out activities relating to funeral plan business. We urge firms and other stakeholders to engage with this consultation, as well as the authorisation process where applicable.

From 29 July 2022, the Financial Ombudsman Service will become responsible for resolving disputes about funeral plans.

Firms should review Chapter 12 for details of the application process, and our dedicated webpage.

Next steps

This consultation has now closed. We will publish feedback on responses and issue a Policy Statement once we have reviewed your comments.

The Treasury is considering further legislative changes for funeral plans to ensure that the Financial Services Compensation Service would be effective for consumers if it covered funeral plans. We will consult later in 2021 on any further rule changes if so.