It’s your funeral so take charge
New rules will offer pre-planning peace of mind
This year, the overall cost of dying has increased once again.
It’s now at an all-time high of £9,493 for a basic send-off, plus you need to account for extras such as professional fees, according to SunLife.
Over the past 15 years, this has increased by almost 6% a year – a rate far higher than inflation.
It has become increasingly common for people to take out a pre-paid funeral plan. Not only is a plan an easy way to get a funeral arranged, it also protects those you leave behind from rising costs and uncertainty about any specific final wishes you may have.
But with that rise in demand has come increased concerns about value for money and services provided.
Without specific legislation, what is covered – and, more importantly, what isn’t covered – when it comes to the plan paying out isn’t always as grieving families expected.
But that’s set to change, with new legislation on the way to bring funeral plan providers under the regulation of the Financial Conduct Authority.
Background
The planned change comes following a government Call for Evidence, launched in June 2018, after Citizens Advice Scotland and Fairer Finance highlighted numerous failings in the sector – including a lack of clarity for consumers, highpressure and misleading sales activity, and a lack of access to redress schemes if things go wrong.
Fairer Finance also raised doubts about the financial soundness of some trust-based providers.
Currently, funeral plan providers can seek registration with the Funeral Planning Authority, but as it is a selfregulatory body, membership of it is not mandatory.
According to the Government, responses to its Call for Evidence confirmed there was consumer detriment in the market and that there was broad demand for the sector to come under compulsory regulation.
As a result, in June 2019, the Government launched a consultation on its proposed approach to strengthening the regulation of the funeral plan market.
After considering the responses, the Government decided to bring funeral plan providers within the remit of the FCA.
It will also extend the jurisdiction of the Financial Ombudsman Service so that it can deal with complaints in the funeral sector. Parliament will be given a vote on legislation to amend the regulatory framework, which is expected to come into force fully 18 months after it is approved.
The FCA says it expects to take responsibility for the regulation of the sector in summer 2022.
What this means for you
While regulation will inevitably add further expense to pre-paid funeral plans, it will also bring you greater peace of mind.
If we leave behind a financial burden to cover the cost of our send-off, it can hurt loved ones particularly badly during an already emotional time.
That’s why these plans can be so important, and greater clarity is welcome. It’s also why you shouldn’t be afraid to take out a plan; just make sure you’re using a reputable firm and understand exactly what is – and isn’t – included in it.
Protect those you leave behind from rising costs & uncertainty of your wishes