What is a trust based prepaid funeral plan?


What is a trust based prepaid funeral plan? main image

A trust based prepaid funeral plan lets you arrange and pay for your funeral services in advance. Paying for your funeral this way means you pay for your funeral services at today’s prices, avoid future inflation if costs rise and remove some of the pressure of arranging a funeral from your family.

The money you pay for this type of funeral plan is held in a trust fund until it is required. Hence the name ‘trust based funeral plan’.

How does this type of funeral plan work?

With a trust based funeral plan you choose the services you want based on your requirements. Typically, this will include the services of a local funeral director, use of the chapel of rest, the hearse, coffin, the service and either the cremation or burial fees. More comprehensive funeral plans may also include a better quality coffin and cars for the family.

You can choose to pay for your plan in one go or by monthly instalments. Your money is held securely in a trust fund until it’s required to pay for your funeral service. Trust funds are usually separate entities to the company providing the plan, managed by trustees in line with the Financial Services and Markets Act 2000.

When the time comes, the funeral director will carry out the guaranteed services included in the plan with nothing more to pay.

What is a trust based direct cremation plan?

A trust based direct cremation plan works in a similar way to a traditional prepaid plan, the difference being that a direct cremation is a simple cremation without a funeral service. With this type of plan there is no hearse or limousines, no use of the chapel of rest and no service at the crematorium. Just a simple unattended cremation, after which the ashes are either scattered at the garden of remembrance or handed back to family.

As a result, trust based direct cremation plans are much cheaper compared to traditional funeral plans.

Are trust based funeral plans safe?

As trust funds are independent entities, should anything happen to the funeral plan provider, the fund remains intact ready to pay for your funeral services. However, for extra security, from the 29th July 2022, the Financial Conduct Authority will be responsible for the regulation of all funeral planning activity.

Trust based funeral plan providers will have to be authorised and comply with the FCA’s strict rules and code of conduct. Being regulated by the FCA also means consumers will have access to both the Financial Services Compensation Scheme and the Financial Ombudsman Service should any issues arise.

How can I pay for a trust based prepaid funeral plan?

You can pay for a trust based plan either in one go or by monthly instalments. Paying in one go is the cheaper option as instalment plans incur additional fees. Having said that, many plan providers let you spread your costs over 12 months at no extra cost.

What other types of funeral plan are there?

In addition to a trust based funeral plan, insurance based plans are also available. The services offered will be similar to a trust based plan, it is just the way your money is held that is different.

With this option, when you buy your plan, your money is held securely in a whole of life insurance policy until it is required.

In addition to insurance backed prepaid funeral plans, you can also get over 50 life insurance which is often used to help with funeral costs. With an over 50 plan, a cash sum is paid out when you die that your family can use however they wish. So, you are not paying for a specific set of services as you are with a funeral plan, just a guaranteed sum of money that can be used to help with costs when the time comes.

Which companies offer trust based funeral plans?

If you want to learn more about which companies offer trust based plans, you can read our funeral plan reviews on our sister website Over50choices. Just click on the company you want to know more about:

Funeral plan provider FCA Regulated National or Regional
Avalon Funeral Plans tick icon National
Celebration of Life tick icon National
Coop Funeral Plans tick icon National
Crystal Cremations tick icon National
Dignity Funerals tick icon National
Distinct Cremations tick icon National
Ecclesiastical Planning Services tick icon National
Golden Charter Funeral Plans tick icon National
Golden Leaves Funeral Plans tick icon National
Memoria (Affordable Funerals) tick icon National
Open Prepaid Funerals tick icon National
Plan with Grace tick icon National
Pure Cremation tick icon National
Choice (Funeral Partners) tick icon Regional
Central England Co-op tick icon Regional
F A Albin & Sons tick icon Regional
Family Funerals Trust tick icon Regional
Freeman Brothers tick icon Regional
Haven Personal Funeral Plans tick icon Regional
Independent Funeral Plans tick icon Regional
Peace Funerals tick icon Regional
Southern Co-op tick icon Regional
Fosters Funeral Directors tick icon Regional
William Alty Funeral Services tick icon Regional

To find out more about the different insurance backed options available, read our simply guide to funeral cover.



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