Should I take out a prepaid funeral plan?
We’re all feeling the economic pinch right now, and it’s important to make financially sensible decisions. Understandably, many people are cancelling funeral benefits and plans, since the collapse of Safe Hands and the huge monetary loss to many people across the country. Trust is really important within any financial transaction, and especially one so important as a funeral plan. We’ve created this guide to ensure that you have access to the information you need before parting with any money.
What is included in a memorandum of wish or funeral wishes document?
What are funeral plans?
A funeral plan allows you to plan and pay for your funeral ahead of time. Many people choose to do this to reduce financial stress on their families, when they pass away. It also allows you to make decisions about what you would like in terms of a send off.
For some this might be a service to reflect their religious beliefs, for others it may be an eco-friendly centred ceremony or even a direct cremation with a celebration at a later date to share memories.
You can plan as much or as little as you like. Your payment is then placed into a trust, which will then accrue value to offset the increase in fees for third party disbursements, this includes fees for; doctors certificates, crematorium or council cemetery fees, celebrant fees and venue fees. Your funeral director fees will be guaranteed and should be laid out in a way which clearly shows everything that you get for your money.
Are funeral plans safe?
From 29th July 2022, funeral plans will become regulated by the Financial Conduct Authority (FCA). This provides a greater level of protection and many prepaid funeral plan providers have already made changes to the way they operate in order to come into line with the regulations ahead of the deadline.
Consumers should check the status of a provider’s application to the FCA and are encouraged to not buy a plan from a provider if its status is ‘not applying for authorisation’, ‘application refused’ or ‘application withdrawn’.
The FCA has published information which helps consumers carefully determine what plans are suitable and where they may incur additional charges. As a minimum, you should make sure the provider is registered with the Funeral Planning Authority, which is explained further below.
If you already have a plan in place and the provider hasn’t applied for FCA authorisation or isn’t going to apply, they should get in touch to notify you what is going to happen to your plan. If you haven’t had any communication, you should get in touch with your provider.
How to buy a funeral plan safely
Below you will find a number of tips on what you should be looking out for when purchasing a funeral plan.
Ask questions
You should feel able to ask as many questions as you need to get all of the information to make an informed decision.
Are they registered with the Funeral Planning Authority?
One of the simplest ways to ensure that a funeral plan provider is legitimate and trusted, is to check if they are a member of the Funeral Planning Authority. We only work with prepaid funeral plan providers who are registered with the Funeral Planning Authority and our chosen provider is Open Prepaid funerals.
Open Prepaid Funeral Plans are members of the Funeral Planning Authority, this ensures they comply with the strict rules set by the FPA. Your money is held in a secure trust fund, a separate entity which is independent from the company. This formatting ensures that if anything happens to Open as a company, your money won’t be affected.
Make comparisons between what is and isn’t included in the plan?
One of the key questions you need to ask is what is guaranteed within your plan. With most funeral plans, your funeral director’s services will be covered, but it’s important to read the fine print as some only provide a contribution.
Comparing plans should be done on a price basis but also on additional costs that may be payable at the time of need. These should be questions your plan provider can answer for you.
Gateway Funeral plans are fully-guaranteed, which means that all costs agreed with you when the plan is taken out, will be covered. As the funds are placed in a trust, the interest accrued should cover any increase in third party disbursements.
If you suspect you may need a funeral in a shorter amount of time than 1 ½ to 2 years, it could be worth consulting with a funeral director to create wishes and place the money into a bank account instead. This is because every plan provider will charge an admin fee on every plan.
All Funeral Directors should be able to provide you with the ‘at need’ costs for a funeral. The price difference between a prepaid and ‘at need’ funeral will vary as the prepaid accounts for the increase in costs for the future, whereas the ‘at need’ price is the current price.
Read reviews
Every funeral plan provider will proclaim to be the best in the business, but one of the best tests of this is to read real customer reviews. Consider the feedback received and how the company responds, alongside looking at the dates on the reviews to find more recent experiences.
Funeral Plans and Over 50’s Insurance
The difference between a funeral plan and an over 50’s insurance policy is the extent of the cover. Over 50’s plans do not guarantee the funeral director services. They typically have low interest rates which can mean that the money you pay in, may not cover the costs in the future. A prepaid funeral plan from Gateway Funerals is designed to guarantee all costs associated with the funeral services.
Key differences between prepaid funeral plans and over 50’s insurance policies are:
– Funeral plans are protected against rising costs of funeral services
– Funeral plans allow family and friends to have a roadmap of what you wanted for your funeral and the funds to carry this out
– Funeral plans are validated by a professional funeral director who understands the industry and requirements
– Both funeral plans and over 50’s policies can be paid on a monthly basis, however, this is the only similarity between the two
Can a plan be moved or transferred?
When choosing a plan, it’s important to consider that you may move house in the future. Whether this is locally or elsewhere in the country, you should check with your funeral directors to see if they can still service your plan.
Many providers will allow you to transfer the plan to another funeral directors or even agree to continue the plan at a distance. For example, Gateway Funeral Services offer free collection within a 20 mile radius, we then charge £1 per mile beyond this radius. This can be taken into consideration and added to your plan if you wish.
Where can I access more help about funeral plans?
There are a number of impartial sources, designed to help consumers make informed decisions about funeral plans.
– Money Saving Expert includes a comprehensive guide to funeral plans and how to navigate safely to protect your finances
– FuneralAdvice.org is a consumer-orientated website set up by the National Society of Allied and Independent Funeral Directors in response to the CMA’s criticism of the difficulties faced by the public in choosing funeral options
– Finally, for further support on funerals and their costs, you can get free and impartial guidance from the Government’s Money Advice Service
Contact us
To speak to one of our professional funeral team members, please contact us on 0800 007 6842 or email info@gatewayfunerals.co.uk
