Prepaid Funeral Plans: Pros and Cons in 2025

A prepaid funeral plan lets you arrange and pay for your funeral in advance, either as a lump sum or in instalments.

Once the plan is fully paid, the funeral director’s services are guaranteed, even if prices increase in the future.

Since July 2022, funeral plans have been regulated by the Financial Conduct Authority (FCA), giving customers stronger protections and access to the Financial Services Compensation Scheme (FSCS) if a provider fails.

But a prepaid funeral plan isn’t right for everyone. This guide sets out the key pros and cons, explains what these plans do and don’t cover, and answers commonly asked questions to help you decide if a prepaid funeral plan is right for you.

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By Clare Townhill • Updated 29 November 2025
Disclaimer: Prices and ratings correct at time of writing.

What Is a Prepaid Funeral Plan?

A prepaid funeral plan is a contract where you pay in advance for most of the services needed for your funeral.

Having a prepaid plan in place means those close to you will have less to organise when you die and less (sometimes nothing) to pay towards your funeral, which can be a huge relief to many families.

Prepaid funeral plans fall into three categories:

Plan Type	Summary
Burial funeral	Burial funeral. A service with mourners where you are buried.
Cremation funeral	Cremation funeral. A service with mourners where you are cremated.
Direct cremation funeral	Direct cremation funeral. A service with no mourners, where you are cremated.

Plans can usually be taken out by anyone aged 18 or over, though some providers limit plans to the over-50s.

If you want to pay via monthly instalments, there might be an upper age limit (often 80) after which you’d need to pay upfront.

You can pay upfront in a single lump sum or spread the cost over 12 months interest-free or over several years (with additional fees).

Most plans guarantee the funeral director’s costs: collecting, preparing, and arranging the funeral.

However, third-party fees such as cremation or burial charges, doctors’ fees, or a minister’s fee may only be partly covered.

If these costs rise beyond the allowance in your plan, your family may need to pay the difference.

Plans are portable within the UK, but some providers charge a fee if you move or transfer to another funeral director.

Moving abroad can make prepaid plans unsuitable or may make them invalid.

Key Pros and Cons of Prepaid Funeral Plans

Key Pros of Prepaid Funeral Plans

Pros	Cons
Lock in today’s prices. Protect against rising funeral costs (average £4,285 in 2025, SunLife). Ease the burden on the family. Removes financial and practical stress at a difficult time. FCA regulation and FSCS protection. Strong safeguards since July 2022. Flexible payment options. Pay in full, 12 months interest-free, or longer instalments (fees apply). Portability. Many plans can be transferred within the UK if you move house.	Key Cons of Prepaid Funeral Plans Not always the cheapest option. Local funeral prices or direct cremation (average £1,597) can be cheaper. Third-party fees may not be fully covered. Extra costs if prices exceed plan allowances. Extra charges if you move or cancel. Some providers charge transfer or cancellation fees. Instalments can cost more overall. Longer terms add fees and risk lapse if even a single payment is missed. Less flexibility. Plans tie you to specific services and providers.

Pros

Cons

Lock in today’s prices. Protect against rising funeral costs (average £4,285 in 2025, SunLife).

Ease the burden on the family. Removes financial and practical stress at a difficult time.

FCA regulation and FSCS protection. Strong safeguards since July 2022.

Flexible payment options. Pay in full, 12 months interest-free, or longer instalments (fees apply).

Portability. Many plans can be transferred within the UK if you move house.

Key Cons of Prepaid Funeral Plans

Not always the cheapest option. Local funeral prices or direct cremation (average £1,597) can be cheaper.

Third-party fees may not be fully covered. Extra costs if prices exceed plan allowances.

Extra charges if you move or cancel. Some providers charge transfer or cancellation fees.

Instalments can cost more overall. Longer terms add fees and risk lapse if even a single payment is missed.

Less flexibility. Plans tie you to specific services and providers.

What’s Usually Included and Excluded

What’s Usually Included ▾

Funeral director’s services (collecting, caring for the deceased, arranging and conducting the funeral).
A basic coffin or casket.
Use of a hearse and sometimes a single limousine.
Professional support and guidance for the family.

What’s Usually Excluded ▾

Full third-party fees: cremation or burial charges, doctors’ certificates, or minister/celebrant fees may be capped or partly covered.
Flowers, embalming, catering, or venue hire for a wake or memorial.
Extra transport, upgraded coffins, or premium options.
Transfers abroad or relocation outside the plan’s network.

Note: Some features may be included in certain plans but not others. Always check each provider’s small print to make sure you are choosing a plan with the features and services that matter to you.

How Prepaid Funeral Plans Work

Choose and pay for your plan. Pay in one lump sum, 12-month interest-free instalments, or longer instalments (with fees).
Funds are protected. By FCA rules, providers must place your money in a secure trust or insurance policy.
Nominate a funeral director. Providers work with approved funeral directors to deliver the plan.
Family contacts the provider. The provider pays the funeral director for guaranteed services.
Covering any extras. Families must pay any costs above the plan’s allowance.

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UK Funeral Costs 2025

The latest SunLife Cost of Dying Report shows that in 2024, the average cost of a simple attended funeral in the UK rose to £4,285 (a 3.5% increase on 2023), beating inflation over the same period.

The overall cost of dying (funeral + send-off extras + estate/probate/professional fees) is now £9,797, also an all-time high, up ~1.4%.

Regional differences are significant. For example, London’s average funeral cost stands at ~£5,449, while Northern Ireland’s is much lower (~£3,441). The North West saw a steep rise of ~13% year-on-year.

Most people (~68%) report that they make some kind of financial provision for their funeral ahead of time, but only ~38% have saved enough to cover the full cost. Many end up having to make up the difference through savings, credit, borrowing, or selling assets.

Source: SunLife Cost of Dying Report, 2025

When a Prepaid Funeral Plan Might Not Be Suitable

Moving abroad or relocating frequently. Plans are for UK funerals and may be costly to transfer.
Uncertain health or short life expectancy. Instalment plans may lapse if payments can’t be completed.
Already covered by other financial products. Savings, over-50s life insurance, or trusts may already meet your needs.
Wanting total flexibility. Plans tie you to specific services and providers.
Potential impact on means-tested benefits (see FAQs).

Alternatives to Prepaid Funeral Plans

Alternative	Description
Direct cremation	Direct cremation: A simple, unattended cremation averaging £1,597 (SunLife Cost of Dying Report).
Over-50s life insurance	Over-50s life insurance: Provides a cash sum but can cost more over time.
Savings or ISAs	Savings or ISAs: Flexible but may not keep pace with funeral cost inflation.
Pay-as-you-go	Pay-as-you-go: Budgeting and paying at the time of need can be cheaper in some areas.

Conclusion

Prepaid funeral plans can offer peace of mind, locking in today’s prices, protecting against future cost rises, and sparing families difficult decisions during a stressful time. FCA regulation and FSCS protection mean today’s plans are far safer than before 2022.

But they’re not for everyone. Plans can tie you to specific services, may not fully cover third-party fees, and aren’t always the cheapest option, especially if you move abroad or prefer a direct cremation.

Before buying, check local funeral prices, read the small print on what’s included and excluded, and consider alternatives like savings or life insurance. If you’re unsure, speak to a regulated adviser or broker to understand whether a prepaid plan is right for your circumstances.

Prepaid Funeral Plans FAQs (2025)

1. What exactly does a prepaid funeral plan cover?

Most plans guarantee funeral director services like collection, care, a basic coffin, and a hearse. Third-party fees may be capped.

2. What’s usually not covered?

Extras like upgraded coffins, limousines, embalming, flowers, catering, or wake venues. Transfers abroad may also be excluded.

3. Are prepaid funeral plans safe now?

Yes, regulated by the FCA with FSCS protection since July 2022.

4. Can I cancel or transfer my plan?

You can cancel within 30 days for a full refund. Afterwards, fees may apply. Moves within the UK are possible but can involve costs.

5. What happens if my provider goes bust?

FSCS protection may refund you or arrange equivalent cover.

6. Do prepaid plans affect inheritance tax or benefits?

Generally exempt from inheritance tax, but it may affect means-tested benefits.

7. How do costs compare with other options?

Average funeral £4,285 vs direct cremation £1,597 (SunLife).

8. Is it cheaper to save instead?

Savings offer flexibility, but funeral costs have risen 126% since 2004.

9. Who regulates prepaid funeral plans?

The FCA regulates all providers. Complaints go to the Financial Ombudsman Service.

10. How do I choose the right provider?

Compare inclusions/exclusions, check Trustpilot/Feefo ratings, verify FCA authorisation, and tell your family where the documents are.

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