In my experience of almost a decade in the Funeral Planning industry I have witnessed a number of changes. In recent years the Funeral Planning Market has evolved significantly and hence the reason I have decided to write this article to assist recent buyers or potential buyers of plans in future.
A funeral plan remains one of the kindest things you could do for your loved one’s. However, with several new providers on the scene and old providers slow to react there are a number of pitfalls I can help you to avoid. First of all, a quick overview:
The Funeral Planning Market
Historically funeral plan providers were few are far between and their prices were determined by the funeral businesses who ultimately require to carry out the funeral. This meant that up until last year, funeral costs have risen steadily. However, as more providers have entered the market prices have begun to stagnate and in some areas even began to decline.
Add to this the introduction of several new low priced budget funeral plans (direct to crematorium style); starting from as low as £1,500, this means the average UK funeral could potentially start coming down. What does this mean for funeral plans and their providers?
If you feel you have been mis-sold a funeral plan then this article contains some important information from experts within the industry. If you would like to talk to someone about your concerns you can get in touch with our retirement experts for free advice.
The ultimate purpose of a funeral plan is to capture the customers wishes to minimise distress for loved ones at a difficult time. This is still the case, and of course having a financial amount set-aside to pay for the main costs is very useful.
Bearing in mind funeral costs are still typically above £3k. However, beware of unscrupulous sales people who are preaching that funeral costs will continue to rise and offering to fix costs. In my experience fixing costs means fixing your plans which could potentially result in you or your family paying too much now. (See quick tips)
As demonstrated simply in the two graphs below, funeral costs have risen steadily in recent history. Many providers are offering to fix costs and ‘guarantee’ they will carry out the funeral at a certain price. If prices continue to rise that could be a good thing (Fig A).
Although, there is one key point. What if they don’t rise? (Fig B). You have committed to paying a value at today’s cost and the price could come down. Also, you typically pay an ‘administration fee’ with most providers which means you are paying for the privilege (as high as £299).
Then there’s the guarantees. Many providers state that their plans are guaranteed. If you read the small print you will find that there are few companies offering a full guarantee. If the “disbursement” or third party costs increase, the provider can request more funds from your family. Or if your family request any small changes, yes you’ve guessed it, the provider can request more funds.
If you try to downgrade your plan at a later date and request a refund this is typically not permitted. Although I can help with that (my contact details are below).
Quick tips for consumers who may have been mis-sold a funeral plan
Planning for a funeral in advance is a good thing to do for your family. Nobody knows if funeral prices will go up or down in future. My view is that as with any service where there is increased competition, prices will stagnate and potentially come down in future. My advice for consumers is:
Never buy a funeral plan from someone insisting you can “protect against rising funeral costs”. Do not be told costs will continue to rise. This is akin to someone predicting the future. For example: Do you remember in 2007 all those financial analysts on the news saying there will never be another recession? What happened in 2008?
Never buy a funeral plan from someone who tells you to get the price “fixed”. This means you are fixing yourself to paying their price, with admin fees and cancellation fees and in some cases no option to make changes you may need.
Never buy or pay for any funeral plan over the phone. Even if the caller suggests they are from a large reputable business. Funeral plans should be explained face to face with no pressure.
Never buy a funeral plan from a third party “introducer”, this is more than likely a business setup to sell someone else’s funeral plan to earn commission. The introducers commission is included in what you are paying. This means you are not getting best value.
Never buy a funeral plan from someone who is not directly employed by the company they are representing. There are many self-employed sales people offering funeral plans for businesses. These salespeople earn a living from selling plans. You can protect yourself by asking if the person is employed, on the payroll of the provider they are promoting to you. Ask if they have an ID badge or business card with the company logo.
Never feel pressurised to make a decision to satisfy a marketed “offer” e.g. Beat the annual price rise. A funeral plan must be considered carefully and professional consultants will provide you with information first and secondly all the time you need.
Wherever possible ensure a family member or friend is aware of your plans.
If you believe you (or a family member) have been mis-sold a funeral plan and require more advice please contact me. I would be happy to help. In some cases, I can ensure a full refund.