It’s your funeral … so plan it well

New regulations are coming in to protect families

The cost of dying is at an all-time high.

A basic funeral will now set you back £9,263, according to SunLife, including professional fees and a send-off.

Costs have increased by almost 6% per annum over the past 15 years – a rate far higher than inflation.

Because of this, it has become increasingly common for people to take out a pre-paid funeral plan.

Not only is it an easy way to arrange a funeral but it means there is no confusion when it comes to your final wishes. It also protects those you leave behind from having to foot the bill.

But the recent rise in demand for funeral plans has resulted in increased concerns about value and outcomes.

Up until now, there has been no specific legislation to state what the plans cover – and what they don’t.

But the Financial Conduct Authority has now published rules for funeral plan providers to follow when they come under regulation from July 29.

The new rules are intended to provide continuity for customers where their plan provider fails, by allowing plans to be transferred to a new provider on the same terms as the original contract.

The rules will also ensure that consumers can receive compensation from their firm if a transfer to another provider is not possible.

Where a regulated provider fails and the Financial Services Compensation Scheme is involved, the FCA’s rules also allow the FSCS to arrange continuity of funeral contracts or pay cash compensation to customers as appropriate.

While the new FCA rules will apply from July, the FSCS rules are dependent on the Government’s proposed funeral plans legislation,

Consider your options carefully to decide if the product is right for you

which are due to be finalised soon. Consumers considering purchasing a pre-paid funeral plan before July should look into their options carefully to decide whether the product is right for them.

Customers do not yet know if their plan provider will be authorised by the FCA – but if something goes wrong, they will be unable to complain to the Financial Ombudsman Service or make a claim to the FSCS until the FCA regulation comes into effect.

If their plan provider fails, their money won’t be protected and they may not get all of it back.

To help new and existing funeral plan customers understand their position, the FCA has published a list of all known funeral plan providers and the status of their applications for authorisation. You can view the list at fca.org. uk/consumers/funeral-plans/ providers-list.

The FCA says that if an existing customer has any concerns relating to their funeral plan product, they should get in touch with their firm to ask whether it intends to seek FCA regulation, and what will happen to their funeral plan.

If the firm is a member of the Funeral Planning Authority, existing customers can also speak to the FPA.

For more money advice, check out warrenshute.com