Are pre-paid funeral plans safe in the UK?
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In short: Since 29 July 2022, providers must be FCA-authorised. FSCS protection applies if an authorised provider fails after 1 November 2022. Always check the provider is on the FCA register, and read the small print on what is and isn't covered — third-party fees often aren't.
Before signing, search the FCA register (register.fca.org.uk) for the provider's name. Pre-2022 plans should have been transferred to an authorised firm or refunded; if you can't trace yours, contact the FSCS.
Plans typically cover the funeral director's services and (usually) the cremation fee. Burial plot, minister, doctor's fees and the wake are often only partly covered via a 'disbursement allowance' that may not keep pace with inflation by the time of need.
Alternatives include a ring-fenced cash ISA, over-50s life insurance, or simply earmarked savings. A plan is most useful where you want certainty of a specific funeral director's services at today's prices.
Primary source: fca.org.uk/consumers/funeral-plans