Is Your Funeral Plan Approved By FCA?

People who have been incredibly organised and already paid for their funeral plans are waiting to find out whether their provider has been approved by the Financial Conduct Authority (FCA), ahead of regulation changes later this year.

From July 29th, it will become a criminal offence if a funeral provider that has not submitted an application to the FCA sells or administers a funeral plan. What’s more, anyone who has already paid for their funerals have not yet been told whether their supplier has been approved by the FCA.

While funeral plans are currently unregulated, this will all change when the new legislation comes in, meaning members of the Funeral Planning Authority (FPA) will have to comply with certain standards and a code of conduct. As such, pre-paid plans need to be overseen by the FCA to ensure these services remain protected, value for money, and of a certain standard.

According to Which?, new regulations will also ban cold calling and commission payments to intermediaries and full checks will be carried out on those selling pre-paid plans.

However, no providers have been approved yet, despite more than half having submitted an application.

Of the 66 suppliers of pre-paid funeral plans, 16 will transfer their existing arrangements to another provider; six have not applied for approval yet, and a further six have withdrawn their applications.

Those who have made these preparations can check what the application status of their provider is by looking on the FCA website. This is also worth looking at for customers who have not yet bought a funeral plan from a supplier but have been thinking about it.

The FCA advises: “Do not buy a funeral plan from this firm until it has confirmed its plans for seeking authorisation. It may not be authorised to continue funeral plan business after 29th July 2022.”

Those who are having their plan transferred should get in touch with their provider to find out more about this, while others have been told to contact the company to see how they will be affected if the firm is not planning to apply for approval from the FCA.

People can request refunds of pre-paid plans, but need to be prepared to pay a cancellation fee if it stipulates this in the contract.

The Which? article advised anyone wanting to buy one of these schemes to wait until the end of July, so you can “compare what’s on offer from each provider once it has been authorised”.

However, MoneyWeek suggests it is more beneficial to save money for death, rather than put it in a funeral plan. Referencing statistics from SunLife, it revealed the average cost of dying, including the funeral, wake and professional fees, is £8,864. Therefore, it is worth keeping this amount in savings for your loved ones to be able to use after you have passed away.

It stated: “You can budget for your funeral in the same way as a plan by making regular payments into a savings account set aside solely for the purpose of covering the necessary expenses.”

As banks typically release funds for funerals without a grant of probate, it is straightforward arranging savings for this purpose, without relying on a third-party company to put the cash into a pre-arranged funeral plan instead.

In addition to thinking about finances, you might also want to plan your own funeral’s order of service, including hymns and readings.