01 / 04 / 22

Prepaid Funeral Plans: Research Your Prospective Provider Before Buying

Prepaid funeral plans have been in the media a great deal in the first three months of 2022 – journalists are beginning to react to the forthcoming introduction of Financial Conduct Authority (FCA) regulation of the industry.

Frankly, the coverage hasn’t all been positive – but the reasons for the FCA’s regulations, which come into force on July 29, 2022, have been clearly illustrated in that coverage: prepaid funeral plan providers who do not or are unlikely to meet the criteria laid down by the regulator effective that date are being progressively removed from the FCA list of companies who will be authorised to trade after that date.

 

The FCA regulations

In short, prepaid funeral plan provider businesses will not be allowed to cold call, they will not be allowed to offer sales commission to introducers or third parties; customer funds must be held in an independent trust to ensure those funds are secure and available when they are needed to pay for a funeral.

Prosperous Life don’t cold call, we employ all staff, and we hold funds in the Great British Funeral Trust which is managed by independent actuaries Embark Actuarial and Guardian Professional Trustees.

The FCA application process is rigorous, and quite rightly so, because many of the people who buy plans might be considered to be “vulnerable” for one reason or another, whether because of age, health or financial position.

The FCA expects regulated firms to adhere to their 11 Principles in their day-to-day conduct.

 

It’s not all bad news

But regardless of some of the media coverage about providers who have already failed, and put their customers’ funds at risk, it is still a good time to consider a prepaid funeral plan. In the next decade or so, the cost of a funeral is forecast by industry and financial experts to more than double from today’s £3,000-£4,000 to around £8,000-£10,000. Buying today, from a provider of whom you ask the right questions, will undoubtedly save you and your family a great deal of money. The Mail on Sunday, while being critical of many providers, spells out the questions to ask here: https://www.thisismoney.co.uk/money/markets/article-10654835/Safe-Hands-funeral-clients-lose-money.html

 

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