A group of MPs are calling for proper regulation for funeral plans which are not always as good value as they seem. Today in Parliament a Bill passed to regulate funeral plans has passed it's first reading. The Bill is supported by MPs from across different political parties, including Jacob Rees-Mogg (Conservative), Rosie Cooper (Labour) and Gavin Robinson (Democratic Unionist Party).
Prepaid funeral plans can be a sensible way to prepare for the rapidly rising cost of funerals, but as more people turn to prepaid plans, an MP is highlighting the concerns about how they are sold.
Neil Gray MP is calling for prepaid plans to be bound by the same rules as other financial services. Currently there is no regulation governing the sale of funeral plans. In a Private Members’ Bill to be given its first reading on Wednesday 14th December, Gray will call for funeral plans to be brought under the jurisdiction of the Financial Conduct Authority.
Speaking in Parliament, Neil Gray (Scottish National Party) said:
"I am proposing this Bill in the context of a 90% rise in the cost of funerals in the last decade. In my own area, North Lanarkshire Council increased burial and cremation charges by 39% last year, the steepest rise in Scotland. Consumers in a vulnerable and bereaved state need to be protected.
Funeral plans cover all associated costs for the funeral, others only basic funeral director costs. It has been suggested some salespeople are misleading customers as to what is included in the contract they are signing up to."
In a climate of rising funeral poverty, people are turning to funeral plans in the hope of avoiding financial difficulty further down the line. But charities and campaigners say that many people are getting stung by hidden costs and unfair terms and conditions.
Christopher, who found himself tied into a very expensive funeral plan after this dad died says:
“After dad died we found out he'd been paying into a funeral plan for six months. We asked the funeral director what to do. I'm on a very low income, but they told me to sign a contract with them because “it's what dad would have wanted”. Suddenly they wanted almost £8000 and I had to pay before dad's funeral. At first they said they absolutely couldn’t make any changes to the contract. They put a lot of pressure on me to do “what dad would have wanted” which seemed to be code for spending a lot of money.
I phoned Quaker social Action who explained to the funeral director that I wouldn't be able to pay that due to my low income. The funeral directors eventually agreed to reduce the price to £5000. I shudder to think how other people cope in my situation.”
At Fair Funerals, we welcome Neil Gray’s call to make the funeral plans industry more transparent and fair. The last thing bereaved people need is a nasty shock when they find out the funeral plan their relative bought wasn’t such a great deal after all.
Heather Kennedy, the Fair Funerals campaigns manager says:
“Funeral and over fifties plans can be good ways of protecting yourself from the high, often unexpected cost of a funeral. But if these plans are to be an antidote to funeral poverty, we need to make them fit for purpose. Terms and condition are in too many cases confusing and opaque and there is a lack of transparent information about what you’re actually buying and whether it covers the full cost of a funeral. People can end up paying in far more than they get out, losing their money if they miss a single payment, or finding that the value of their plans actually falls well short of the total funeral bill."
Here are some questions that Fair Funerals suggest people ask when they’re thinking about buying a funeral plan:
- Does the plan tie you to a certain funeral company? What happens if you move or the company shuts? Will you be restricted to a funeral director hundreds of miles away?
- Does the provider say how much they’ll pay towards mandatory third party costs? (These usually make up around a third of the overall bill). These costs are always on the rise and many funeral plans don’t cover them or don’t keep up with rising prices.
- Does the plan guarantee to cover all costs or just a lump sum? Would it be better just to save the money elsewhere without restrictions on the funeral? This is one to especially watch out for in the case of over fifties plans.
- What happens if you miss a payment? Many plans will cancel your plan with no refund if you miss a payment.
If you need support and advice organising a funeral, our sister project Down to Earth for people on low incomes might be able to help.