Consumer Protection

There has been some publicity about what protection is available for consumers who have a funeral plan. In August 2017 the Financial Services Compensation Scheme (FSCS) confirmed that funeral plans “would not be covered by the FSCS because these products are not categorised as a ‘designated investment’ under FSCS’s compensation rules”.

FSCS protects consumers when financial services firms fail [or go bust]. It’s the compensation scheme for customers of UK authorised financial services firms. They cover business conducted by firms authorised by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

When a customer purchases a funeral plan they are protected; just not, necessarily, by the FSCS.  There are a number or mechanisms in place that protect customers who purchase a funeral plan.

It is worth noting that the rule of law in the UK is renowned throughout the world – funeral plan companies must abide by an extensive amount of legislation (i.e. laws) to operate and provide funeral plans to customers. If a company did not abide to legislative requirements it would be in breach of legislation and those involved may be prosecuted, and if found guilty they could go to jail.

The board of directors and trustees involved in funeral plan companies are considered to be highly experienced law-abiding citizens who conduct their affairs and that of the companies they operate or are involved in, in a legal and complaint manner and themselves are subject to audits to ensure their suitability.

When an individual takes out a Funeral Plan their money is either held in trust or whole of life policy. For further information please Click Here. Funeral Plan providers have a legal requirement to ensure compliance with the ‘Regulated Activities Order’ of the Financial Services and Markets Act 2000.

All of the funeral plan providers compared on the Funeral Plan Market website comply diligently with the legislation. If one of these funeral plan providers did go out of business this would NOT affect the customer’s funeral plan because their money would be in trust or a whole of life policy which by law are independent of the funeral plan company.

The below lists how a customer is protected when they purchase a funeral plan and recommended practises to consider when choosing a funeral plan:

  1. English Trust Law

    There are a number of statutes designed to protect beneficiaries, or regulate the trust relationship, including the Trustee Act 1925Trustee Investments Act 1961Recognition of Trusts Act 1987Financial Services and Markets Act 2000Trustee Act 2000. Please note that this list is not exhaustive.

  2. Section 75 of the Consumer Credit Act

    According to Money Advice Service:

    “The Financial Conduct Authority (FCA) doesn’t regulate funeral plans covered by insurance or trust arrangements.

    It does however stipulate rules for each method of investment, so sums paid by the customer are safeguarded and available to pay for the funeral when needed.

    If you’re paying for your funeral bill upfront, you could consider paying for part of on your credit card.

    When you pay with your credit card, you benefit from Section 75 of the Consumer Credit Act.

    This means you can get extra protection if things go wrong with the funeral director.

    You could also get this protection if you were to pay at least £100 of the funeral bill upfront, and then pay off the rest of the balance in monthly instalments.”

    The Money Advice Service was set up as an independent body with responsibility for improving people’s money management in April 2010. They were initially known as the Consumer Financial Education Body, the name used in the Financial Services Act 2010 which sets out their statutory objectives. The Money Advice Service is funded by the Financial Conduct Authority (FCA) who appoints the board of the Money Advice Service.

  3. Visa, MasterCard and Amex Chargeback Scheme

    Whereas Section 75 of the Consumer Credit Act only covers credit card purchases over £100 the chargeback scheme covers debit card transactions as well. The chargeback scheme provides customer protection for good and services purchased that were faulty or not delivered (and includes cover for when a business has gone out of business/gone bust)

    In the case of funeral plans paid monthly only the deposit or 1 monthly payment would have need to be made by Visa, MasterCard or Amex [credit or debit card] for the full price of the funeral plan to be covered (for MasterCard only a minimum spend is required of £10).

    Although it is extremely unlikely this mechanism would ever be used for a funeral plan because the money is held securely in trust or whole of life policy it is nice to know this protection exists.

  4. Industry Regulation

    Although funeral plan companies do not need to be authorised by the FCA the Funeral Planning Authority (FPA) does exist to protect customers.

    For a funeral plan provider to be a registered provider of the FPA the provider must comply with the Rules and Code of Practise requirements, which are extensive and go beyond statutory requirements.

    To view the rules visit: http://funeralplanningauthority.co.uk/regulations/rules/

    To view the code of practise view: http://funeralplanningauthority.co.uk/regulations/code-of-practice

    The FPA has an independent Board and Compliance Committee.  Every year all registered providers go through a rigorous due diligence and re-registration process with the FPA which includes a full valuation of the companies trust fund (assets against liabilities).  Any company which fails to meet the strict standards required by the FPA will have their registration revoked.

    FPA membership by a funeral plan provider is detailed on the results page when you compare plans. To compare funeral plans please Click Here.

    For further information on funeral plan providers please Click Here.

  5. Trust Funds

    When a customer purchases a funeral plan using a supplier set up through Funeral Plan Market the money is held in trust or whole of life policy. Even if a funeral plan company did go out of business, the funds in the Trust are ring-fenced and cannot be accessed by the company as the money is protected by the independent trustees.

    It is a legal requirement for the trust to be run by independent Trustees who are responsible for accounting for all monies into and out of the Trust, they are responsible for ensuring the money from the Trust is used for the funerals of the plan holders.  Should a FPA registered funeral plan provider go bust (which has never happened) the trustees would work with the FPA to ensure the funeral plan commitments were fulfilled.

    For further information on trust funds used by each of the funeral plan providers please Click Here.

  6. Funeral Plan with Insurance

    Funeral Plan Market compare an insurance backed funeral plan provided by Golden Leaves. In the case of this product the money does not go to the Trust fund but it goes into a whole of life insurance policy which is managed by SunLife. SunLife is part of the Phoenix Group which is an FCA regulated company with assets of £64 billion.

 

The Money Advice Service

The Money Advice Service is funded by the Financial Conduct Authority (FCA) who appoints the board of the Money Advice Service

The Money Advice Service lists a number of questions on their website to ask the funeral plan provider.

Below are those questions which we have answered:

If you cancel your plan within the cooling off period there is not a cancellation fee and you will receive a full refund. The cooling off period varies by provider and is detailed in the table below.

Should you cancel outside the cooling off period you will receive a refund of all monies paid less a cancellation fee. Again the cancellation fee varies by provider and is detailed in the table below:

Funeral Plan Company Cancellation Fee Cooling off period
Avalon £395 30 days
Capital Life 20% of Funeral Plan price 21 days
Choice £500 30 days
Co-op £250 30 days
Dignity £395 28 days
Golden Charter £249 30 days
Golden Leaves 20% of Funeral Plan price 30 days
Open Prepaid £345 30 days
Perfect Choice £160 + charge from Funeral Director 30 days
Pride Planning 20% of Funeral Plan price 14 days
Safe Hands Funeral Plans £495 21 days

Each funeral plan varies in terms of what is included depending on what you want and this is detailed on the comparison table when you Compare Plans, to do so please Click Here.

All funeral plans include the following features:

  • Price is FIXED to protect you and your loved ones from rising costs
  • Funeral Directors professional services (use of local funeral director)
  • Cremation or Burial
  • Attending to all necessary funeral arrangements
  • Advice on certification and registration
  • Family support and guidance
  • Coffin
  • Removal of deceased to Funeral Director’s premises
  • Organising the service at the crematorium or cemetery
  • Attendance of conductor and bearers
  • Funeral Procession to Crematorium or Cemetery
  • Provision of funeral hearse
  • Preparation and care of the deceased prior to the funeral
  • All staff required to conduct the service
  • Choice of Humanist or Religious service
  • Specify requests including choice of music, hymns, readings and dress code
  • Allowance to cover 3rd party costs:
    • Cremation / Interment fees,
    • Minister/Celebrant fees

The value of the allowance increases each year in line with inflation, with the exception on Golden Charter – for all other providers that provide an allowance the value increases each year as part of the plan.

All funeral plans do NOT include

  • Plot required for burials
  • Flowers
  • Catering
  • Notices in newspapers
  • Printed order of service
  • Repatriation

Medical certification fees required for cremation are only required in England and Wales (not Scotland) when a coroner’s report is not available – some funeral plan providers include these fees in the 3rd party costs whilst other do not. This is clearly labelled on the results table when you compare funeral plans, please Click Here to compare plans.

  1. All funeral plan providers include a radius in which to the collect the deceased at the time of need which is between 15 and 50 miles (this varies by provider and is detailed on the results table when you compare plans). If the distance required to collect the deceased is greater than the allowed radius a mileage fee may apply, payable by the family or next of kin to the funeral director.
  2. If a customer moves home to a different locality an additional charge may be incurred (Co-op, Dignity and Safe Hands Funeral Plans do not charge). This is because of the cost involved of changing the allocated funeral director. For further information on funeral plan providers and charges for changing address please Click Here.
  3. The majority of funeral plans include an allowance for 3rd party fees, should this allowance not be sufficient to cover the cost of these fees the family or next of kin may be required to pay the difference. For further information on 3rd party fees (also know as disbursements) please Click Here.
  4. When a funeral plan does not cover the cost of medical certification fees required for cremation (should they apply) the family or next of kin will need to pay them – these fees are currently £164. Please note these charges do not apply in Scotland and are currently under review by the government Department of Health and reforms are expected to be introduced from April 2018, for further information please visit: https://www.gov.uk/government/publications/changes-to-the-death-certification-process/an-overview-of-the-death-certification-reforms
    The Department of Health’s preferred option for England is a nationally-set fee. The consultation documents and assumptions suggest this fee will be between £80 and £100 for both burial and cremation.
  5. A funeral director is not allowed to register a death – this is a requirement of a family member and costs £4. (if a family member does not exist or cannot be located the local authority will assume responsibility).
  6. Should the family have requirements outside the purchased funeral plan such as a limousine or use of the chapel of rest for viewing a charge may apply – these requirements are available in some funeral plans however it depends on what type of funeral plan the deceased has purchased as to what extras are included.

This is dependent on the funeral plan you purchase. As a rough guide funeral plans that cost less than £3,000 do not allow the plan holder to choose their own funeral director whereas funeral plans that cost more than £3,000 do.

When you compare plans please read the ‘More Information’ section to see if choosing your own funeral director is included. To compare funeral plans please Click Here.

In the event that this should happen the funeral plan provider will allocate a different funeral director at no extra cost to the plan holder. Should the plan include the option for the plan holder to choose their own funeral director the plan holder can choose a different funeral director instead.

Funeral Plans do not include repatriation costs. It is recommended that plan holders have adequate travel insurance in place to cover repatriation costs. Should a plan holder die abroad collection of the deceased from the airport will be arranged.

If the plan holder dies away from home but in the UK the deceased will be collected by the allocated funeral director – if the mileage for collection exceeds the mileage radius included in the plan then a mileage charge may apply which the family or next of kin will be required to pay to the funeral director.

The funeral director signs a contract with the funeral plan provider to provide the funeral as per the features of the plan purchased. This contract is a legal document ruled by UK law; the funeral director is legally obliged to fulfil their requirements of the contract.

If the family requests the funeral director could provide additional services for the funeral however the family would potentially have to pay an additional amount for these services for example if a horse drawn carriage hearse was requested.

When you purchase a funeral plan you have 4 payment options:

  1. Pay in full
  2. Pay a deposit and then pay monthly over 1 -25 years
  3. Pay no deposit and pay monthly over 1 -25 years
  4. Pay monthly for life or until 90 (this is an insurance backed plan)

The payment options vary by provider, and the age of the funeral plan holder, to compare the options available please Click Here.

When you spread the cost over 1 year (or up to 2 years in the case of Safe Hands Funeral Plans) there are no additional charges, the total amount payable is the same as the funeral plan purchase price.

When you spread the cost over a longer period interest is not applied because credit is not being provided (this is because the plan holder is paying for a funeral they have not yet received). An instalment charge however does apply which varies by provider between 4% and 6%.

Should the plan holder die before the monthly payments of an instalment plan have completed the family or next of kin will have to pay the balance due for the funeral director to commence activities.

A main benefit of a funeral plan is that the wishes and requirements of the plan holder can be documented prior to death so when the time comes the family have the peace of mind that the funeral is being carried out as per the plan holder’s desires. This includes, but is not limited to choice of:

service type (humanist or religious); dress code; music, prayers, readings, hymns, charitable donations, wake requirements, consent to viewing in chapel or rest, eulogy content, persons involved in the service, clothing for deceased to be laid out in.

The plan holder can change their wishes and requirements for the funeral at any time without charge.

Should the plan holder move home to a different locality or change their mind of their chosen funeral director an additional charge may apply, which will vary by funeral plan provider.

When a funeral plan is set up the plan holder is provided with their funeral plan documentation by post, this is usually within 14 days of the set-up date. Included in this documentation is a bereavement telephone number to be contacted when the time comes. At this time, collection of the deceased to take to the funeral home will be arranged.

It is important the plan holder makes their family aware that they have a funeral plan and what the bereavement telephone number is.

Funeral Plan Market has a Primary Authority relationship with West Yorkshire Trading Standards, for further information about Primary Authority please Click Here.

Fair Price Charter, FPA, NFFD, NAFD and NAPFP are organisations funeral plan providers featured on this site may be associated with, for further information about funeral plan providers please Click Here.