Should you buy a funeral plan?

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.

But a prepaid plan isn't the only way for you to cover the cost – and it won't include everything you need for a funeral.

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

How much does a funeral cost?

How much a funeral costs varies hugely depending on the type of send off you want, whether you opt for cremation or burial and where you are in the country.

According to insurer SunLife's 2026 Cost of Dying Report, the average cost of a traditional attended funeral – with things like a limousine and pallbearers, a mid-range coffin and use of a chapel of rest – reached £4,510 in 2025.

But many people are now choosing simpler, cheaper alternatives. This table shows the average costs of three different types of burial and cremation.

Costs also vary a lot by region, with the price of a simple attended funeral ranging from £3,105 in Northern Ireland to £4,897 in London. 

Cost a simple attended funeral across the UK

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. The Competition and Markets Authority decided not to introduce price controls in its 2021 Funeral Markets Investigation Order, but they could be introduced in 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 plans might change: You may need to cancel your plan if you change your mind, move abroad or to a new area. While you will usually get your money back, some providers charge a cancellation fee.

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.

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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. Below we've provided a rough guide to the different types of funeral plans. 

Be aware that there's no industry standard for what each type of plan includes, and providers may use different terms to the ones we've used here.

It's also worth noting that there are currently very few environmentally-friendly funeral plans.

Direct cremation or burial

Direct cremation or burial is the cheapest option most providers offer. These plans cover the cost of cremation or burial 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.

Traditional funeral plans

These tend to include the collection, care and transport of the deceased, along with all the standard elements of a traditional attended funeral, including a funeral director to lead the service, and hearses and limousines.

Providers sometimes offer tiered plans – e.g., bronze, silver, and gold. More expensive plans may include multiple limousines, a more expensive coffin or more flexibility on the timing of the funeral.

Pay attention to whether cremation and burial costs are guaranteed, as some plans may only make a contribution towards these costs.

Hybrid funeral plans

Hybrid funeral plans sit somewhere between direct cremation and a traditional funeral. You'll get an attended service at a lower cost than a full traditional funeral.

They generally cover the collection, transport and care of the deceased and the cremation, along with the cost of a smaller or simpler attended service.

These plans are cheaper than tradition funeral plans but there will be limitations on the service. For example, there may be limits on the number of attendees, the length of the service, or when you can arrange the funeral (often restricted to midweek).

According to consultancy Funeral Solutions Expert (FSE), providers tend to offer two types of hybrid plan:

• 'Intimate' plans: these offer a short service for 10-20 close family and friends.
• 'Essential' plans: these offer a simple, full-length attended service, without some of the elements of a traditional service (e.g. no funeral cars or limousines).

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 to more traditional options. There are also a number of providers who only offer direct cremations.

The table below shows the average prices for four different types of funeral plan offered by national providers:

You can buy a funeral plan from 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. 

Your local funeral director may be cheaper than national providers, so it's important to shop around for quotes.

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 £1,500 and £5,000, depending on the type of funeral. 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

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 also 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.

If you buy a 'contribution’ plan, the provider only pays 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.

Can you pay for a funeral plan in instalments?

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. In 2025, 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 

What happens if I die before the plan is paid?

Under 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?

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

As of March 2026, 31 funeral plan providers were 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.

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

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. Decide what type of funeral you want

It's important to spend some time considering what type of funeral you want. 

You should consider whether you want your friends and family to be able to attend, whether you want to be buried and cremated, and whether you want the traditional elements of a funeral - like limousines and pallbearers.

It's worth having an open conversation with your loved ones about your wishes, as this can reduce the risk of stress or extra spending after you've died.

• Find out more: funeral costs on the rise - how talking about it could help.

3. Shop around for quotes

Once you've decided what type of funeral plan you want, you should get quotes from national providers and local funeral directors.

What's covered will vary by providers, so pay close attention to what's included and make sure you fully understand the plan before you buy. 

Check whether there are any cancellation fees and whether the full cost of burial/cremation is guaranteed.

4. 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.

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.

You should consider creating a folder of important documents for your executor, including information about 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.

7. Understand your options if you change your mind

Under FCA regulation, all funeral plan providers must provide a full refund if you cancel your plan within 30 days.

 After the cooling-off period, companies are allowed to charge a reasonable admin fee for cancellation. According to Funeral Solution Expert, the average cancellation fee is £221 for direct cremation and £228 for traditional funeral plans.

Some providers set cancellation fees at over £300, while others will allow you to cancel free of charge, so it's important to pay attention to the terms and conditions.

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 depends on how much money was left by the deceased, including whether they held a funeral plan. 

Visit mygov.scot to see how much each council will contribute towards the cost of burial and cremation.

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’.