Funeral plans explained

What is a funeral plan?

A funeral plan allows you to pay upfront for your funeral so your relatives don't have to cover the costs themselves.

Since funerals are often expensive, paying in advance can bring you some peace of mind. However, a prepaid plan isn't the only way for you to cover the costs.

A funeral plan won't include everything you need for a funeral, and exactly what is covered will vary from provider to provider. 

This guide explains how funeral plans differ, as well as what you should consider before buying one.

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How much does a funeral cost?

Funeral costs reached an all-time high in 2024, with the average cost of a simple attended funeral in the UK hitting £4,285 according to SunLife's 2025 Cost of Dying report.

 And prices may keep rising - SunLife forecasts that the average funeral will cost over £5,000 by 2028.

The table below shows the average cost of a simple attended funeral in 2024, by region:

Do you need a funeral plan?

When deciding whether a funeral plan is right for you, it's important to weigh up the benefits and the risks.

Advantages:

• They're protected against inflation, so even if funeral costs go up (as they have done consistently in recent years), your funeral plan won't reflect this.
• They lock in your funeral arrangements now. This saves your family some of the stress of organising every aspect of the funeral themselves.

Disadvantages:

• Even if funeral costs fall, your payments won't fall. This is possible if the Competition and Markets Authority ever chooses to implement price controls in the funeral market, which it says it is still considering as an option in the future.
• Your family could face unexpected costs. Funeral plans don't cover all the costs of a funeral. If anything is left to be paid, your family will have to make up the shortfall.

Your family are allowed to pay for your funeral using money from your estate as soon as you die (and it's not subject to inheritance tax).

We've listed other alternatives to funeral plans below.

How do funeral plans work?

When you take out the funeral plan, you decide on what you'd like your funeral to include. You can nominate a loved one for the firm to contact while buying the plan.

After you pass away, your family gets in contact with the funeral plan provider. It works with the funeral director to organise the funeral.

What's paid for by the funeral plan varies hugely, and providers usually offered tiered plans. Below we've provided a rough guide as to what you can expect the different types of plan to include.

Direct cremation

Direct cremation is the cheapest option most providers offer and covers the cost of cremation without a funeral ceremony

These plans usually cover the cost of cremation, transport for the deceased to the crematorium and a basic coffin.

This option doesn't involve an attended service - your loved ones won't be able to attend the cremation and will need to arrange a memorial or life celebration separately.

Basic and standard plans

You'll generally get the essentials including a funeral director's services, coffin, hearse, simple service, transport for the deceased and contribution towards cremation or burial fees.

A basic plan will be cheaper, but there'll be certain limitations on the service - for example, the date and time of the funeral may be restricted. 

Contributions to cremation or burial costs may be low, so your family might have to make up the difference.

Limousines may not be provided for the funeral procession and there are limitations on when you can arrange the funeral (often restricted to midweek) or viewings.

Comprehensive plans

These may include higher contributions or guarantee to cover the cost of some third party fees.

You could also get multiple limousines and more flexibility on the timing of the funeral, and for friends and family who want to arrange viewings.

They also offer the ability to make additional contributions towards special requests during the lifetime of the plan, and complimentary thank you cards at the service.

How much does a funeral plan cost?

Providers typically offer a range of options depending on how much you'd like to spend, from direct cremation and basic plans, to more bespoke options.

The table below shows the average prices for direct cremation, basic plans and premium plans.

You can buy a funeral plan from either a funeral-plan provider or directly from a funeral director - but they'll need to be authorised by the Financial Conduct Authority to sell plans. 

You have the choice of either paying a lump sum or monthly instalments, usually over one to ten years. 

One-off payments generally range between £3,000 and £5,000. Many providers offer interest-free payments over 12 months, but look out for extra charges if you spread out payments over a longer period.

• Find out more: how to make a will

Can you pay for a funeral plan in installments?

Yes. If you pay within 12 months you can often spread out payments without incurring interest.

It's sometimes possible to get longer 0% interest deals, lasting up to five years, in the case of a market study by consultancy Funeral Solution Expert (FSE).

However, most longer deals (which go up to 22 years, for some providers) will require paying interest. FSE found rates ranging between 4.85% and 18.06%.

While not as high as most credit card or overdraft rates, these interest payments are higher than what you're likely to earn from savings. Therefore if you can afford to buy a funeral plan upfront, this will likely work out cheaper than spreading out payments over a very long period.

An interest-free credit card could provide a compromise option: the longest tend to offer a little over 20 months in which you can pay off your balance.

• Find out more: Best interest-free purchase credit cards 2025 

What costs aren't covered?

Some considerable costs aren't covered by funeral plans. These may include:

• Burial plots
• Flowers
• The wake
• Catering

There’s a crucial difference between ‘guaranteed’ and ‘contribution’ plans. A ‘guaranteed’ plan covers third-party costs, also known as disbursements, such as cremation, burial and minister’s fees.

More common are ‘contribution’ plans, where the provider pays only a fixed amount toward these costs. If third-party expenses exceed the provider’s contribution, your family must cover the remainder. For example, many providers only contribute towards the cost of cremation or burial.

With both types of plans, it's worth checking if other costs will be covered, such as collection of the body from where the person died; possible timings for collection; removal of pacemaker; return of ashes to your family (if getting cremated) and any size restrictions for the coffin, if you're particularly tall.

What happens if I die before the plan is paid?

Under new Financial Conduct Authority (FCA) rules, a funeral plan will always provide a funeral, unless you die within two years of taking it out, in which case a refund will be offered.

If you cancel within 30 days, you’ll always get a refund, although a reasonable admin fee may be charged.

Is my money safe in a funeral plan?

To safeguard your plan, your provider will either place your money in a trust fund or invest it in an insurance policy that pays out when you die. The FCA has rules to protect your money in both instances.

You may also be protected under Section 75 of the Consumer Credit Act 1974. Under the Act, a credit card provider must protect purchases over £100 if there is a problem with good and services you have paid for, or if the company you are buying from goes bust.

If you are paying for your funeral plan in total upfront, you can benefit from Section 75 protection by putting part of the bill on your credit card.

If you want to pay by monthly instalments you can also gain protection by using the a credit card to pay any deposits or asking your provider to pay part of the bill upfront using the card.

• Find out more: Section 75 protection explained

Are funeral plans regulated?

Since July 2022, the Financial Conduct Authority (FCA) has regulated the funeral plan sector. 

31 funeral plan providers are currently authorised by the FCA. But several firms went bust during the clean up, including Safe Hands, leaving 46,000 customers with a worthless plan.

FCA regulation includes:

• A ban on cold calling and new standards on advertising to make sure plans are sold fairly.
• A ban on commission payments to intermediaries such as funeral directors.
• Full 'fitness to operate' checks on those selling funeral plans.
• A guarantee that funeral plans will always provide a funeral, unless the customer dies within two years of taking out the plan, in which case a full refund will be offered.
• A guarantee that customers will get a full refund if they cancel a plan within 30 days, or pay a reasonable admin fee if they cancel after that.

You'll also be covered by the Financial Services Compensation Scheme (FSCS) if your provider goes bust, up to £85,000, and you can escalate a complaint about a funeral plan provider to the Financial Ombudsman Service.

Funeral plan providers are also bound by the FCA's Consumer Duty rules which were brought into effect in July 2023 to raise the standards of how financial firms treat customers. 

It means that funeral plan customers should receive communications they can understand, products and services that meet their needs and offer fair value, and get the customer support they need, when they need it.

What are the alternatives to a funeral plan?

A funeral plan is one way of ensuring your family doesn't have to shell out thousands of pounds after you're gone. But what are the alternatives?

What if you can't afford a funeral?

People in receipt of certain benefits might be eligible for state support for the funeral costs. 

The government offers a Funeral Expenses Payment, which covers the cost of the burial or cremation and contributes up to £1,000 towards other costs.

However, if the deceased held a funeral plan, you can only get up to £120 to help pay for items not covered by their plan.

If you live in Scotland, you can apply for a Funeral Support Payment instead. The amount of Funeral Support Payment you get will depend on your circumstances, but the average payment is expected to be £2,065.

A public health funeral is arranged by the local council when no other suitable arrangements are being made – for example, when there’s nobody to organise the funeral or when the deceased and their relatives can’t afford to do so. 

To find out more, it’s best to search the relevant local authority where the deceased lived and search ‘public health funeral’. 

Buying a funeral plan: a step-by-step guide

If funeral plans are for you, following our tips will help you make sure you get the right one to suit your needs.

1. Consider how your family would cope financially when you die

Funeral plans are designed to help meet the cost of the funeral when you're gone, so think carefully about your family's finances.

If your estate could cover the cost of a funeral, even with the likely increases, or your family has the money, a basic plan - or even no plan at all - might be the best option.

Consider whether they might be better off if you took out life insurance instead of or in addition to the funeral plan.

• Find out more: best life insurance UK 2025

2. Find a number of policies quickly by using a comparison site

A comparison site is a good way of taking the legwork out of finding a number of suitable plans.

Over50Choices, for example, compares many of the big providers, so are a good starting point.

Whatever comparison site you use, always read the website's terms and conditions before using one, and refrain from giving you out your email or phone number in order to get a quote. If you do want to input your details, consider setting up an alternate email address so you don't get spammed.

Remember, however, that funeral plans can be complex so you should examine the policy carefully and phone the provider if you are unsure about any of the details.

3. Pay for your policy as quickly as you can

Like many other financial products, such as car and home insurance, funeral plan providers give you the option of paying either in instalments or in a lump sum.

Most providers give you the option to pay over 12 to 120 months. Many allow interest-free payment over 12 months, but spreading the cost over a longer period will cost more because of administration fees and interest.

4. Read your documents carefully

While funeral plans cover much of the cost of funerals, there are many items that are exclude, such as headstones and burial plots. Some costs are also capped, such as burial and cremation costs.

Read the documents carefully to make sure you understand the plan fully - as well as its limitations - before you buy.

5. Tell your loved ones

If, after you die, your plan goes unclaimed, then the funeral plan provider could repatriate the money.

Make sure your family know you've bought one, and who with, to save them the trouble of hunting down your funeral plan.

6. Speak to your provider if you move house

Most plans specify how far the funeral director will travel to collect the body of the deceased. For example, Dignity funeral plans have a collection radius of up to 50 miles. 

If you move out of the collection radius, it's important that you speak to your provider. If your chosen funeral director doesn't operate in the area, you may be able to switch. Most plans allow you to change funeral directors free of charge, but some charge a fee.

Be aware - if your funeral plan provider doesn't work with any of the funeral directors in your area you may have to cancel your plan.