Money
Prepaid funeral plans: what changed under FCA regulation
Last updated 30 April 2026
Since July 2022 the UK’s prepaid funeral plan market has been regulated by the Financial Conduct Authority. The change followed a series of provider failures and weak consumer protections — most notably the collapse of Safe Hands Plans. Today’s rules are materially stronger, but the structural questions about whether a prepaid plan is the right purchase haven’t gone away.
What FCA regulation changed
- Plan providers must be FCA-authorised. Selling an unauthorised plan is a criminal offence.
- Cold-calling and commission-based selling is banned.
- Customer money must be held in a trust or insurance contract that segregates plan funds from the provider’s working capital.
- Plans now fall within the Financial Services Compensation Scheme, giving consumers protection if a provider fails.
- Plans must give a full refund within 30 days of purchase and pro-rata thereafter, with a small admin fee.
What a plan typically covers
Most plans guarantee the funeral director’s charges at today’s prices, locked in regardless of when the funeral takes place. The third-party disbursements — cremation fee, doctors’, clergy — are usually not guaranteed; plans either offer a contribution toward them or exclude them entirely. Read the plan summary carefully on this point.
Questions to ask before buying
- Is the provider FCA-authorised? (Check the FCA’s register, not just the brochure.)
- Is the funeral director who will deliver the funeral named — or chosen later?
- Are disbursements covered, partially covered, or excluded?
- What happens if the deceased’s preferred funeral director isn’t in the plan’s network?
- What are the cancellation and transfer terms?
Alternatives
A plan isn’t the only way to put money aside. A simple savings account, a cash ISA, or an over-50s life policy each handle the same goal differently — with different tradeoffs around inflation, access, and tax. Before committing, it’s worth comparing what each route would actually pay out against the published cost of the funeral the family expects to want.
Frequently asked questions
Are prepaid funeral plans safe now?
Materially safer than before July 2022. FCA authorisation, segregated trusts, FSCS coverage, and a ban on commission-based selling have changed the market significantly. The basic 'is this the right product for me' question is independent of regulation.
What was Safe Hands and why does it matter?
Safe Hands Plans was a UK funeral plan provider that collapsed in March 2022, leaving around 46,000 customers with plans that could not be honoured. The case was a key driver behind FCA regulation taking effect later that year.
Will my plan cover the cremation fee?
Often only partially. Most plans either contribute a fixed sum toward disbursements or exclude them. Cremation fees rise faster than general inflation, so the real cover the disbursement contribution provides decreases over time.
Methodology
Prices are taken from funeral directors’ published CMA Standardised Price Lists where available. Funeral Cost Index does not sell placement to funeral directors and does not rank providers by commission.
Find published prices near you
Search by postcode or browse cities to see funeral directors’ published Standardised Price Lists in your area.