FCA begins regulation of funeral plans



The Financial Conduct Authority has begun its long-awaited regulation of the funeral plan market from today.

The FCA has authorised 26 providers so far but has already rejected an application from one provider, One Life Funeral Planning Ltd, which has the right to appeal.

The watchdog said the regulated firms provide 1.6 million plans, mainly pre-paid packages, which make up 87% of the market.

The FCA says that regulation of the sector will bring “higher standards and boost consumer protection.”

The Financial Services Compensation Scheme has also confirmed this week that funeral plan providers will now be covered by its scheme meaning that it will compensate the victims of any failed providers.

The new FCA rules include:

  • A ban on cold calling
  • A ban on commission payments to intermediaries, such as funeral directors
  • A requirement for a funeral plan to deliver a funeral unless the customer dies within two years of taking out the plan, in which case a full refund must be offered

Consumers can also make a complaint to the Financial Ombudsman Service (FOS) even if the issue they are complaining about happened before July 2022 if the firm was registered with the Funeral Planning Authority (FPA) at the time the issue occurred.  

Some 13 firms that applied before 1 March 2022, but have not been authorised, have until 31 October 2022 to transfer their plans to authorised firms or refund their customers. These plans are not covered by FCA regulation or FOS and FSCS protection until they are transferred to authorised providers.

Emily Shepperd, executive director of authorisations at the FCA, said: “We are pleased that 87% of the market is now under regulation. With our new rules in place, consumers will be better protected when they need it the most.

“It is unfortunate that a number of firms chose to exit the market, leaving customers, who had sought peace of mind for their loved ones, understandably worried. It is a good outcome for consumers that some providers have stepped in to provide funerals for the customers of these providers at short notice. We also continue to engage with the industry while it works on a longer-term solution.”

The FCA says the extension of its regulation follows the confirmation of the FCA’s plans to introduce a new consumer duty from July 2023. The regulator says the consumer duty will apply to funeral plan providers.

  • List of providers the FCA has authorised:
    • Alternative Planning Company Limited (this includes Choice and Choice funeral plans from Funeral Partners)
    • Avalon (Europe) Limited
    • Avalon Trustee Company Limited
    • Celebration Of Life Planning Ltd
    • Central England Co-Operative Limited (this includes CEC FPL and CEC Funeral Plans)
    • Co-Op Funeral Plans Limited (this includes Co-op Funeral Plans and Co-op Funeralcare)
    • Crystal Cremations Ltd
    • Dignity Funerals Limited
    • Distinct Funeral Plans Limited
    • Ecclesiastical Planning Services Limited (this includes Perfect Choice Funeral Plans)
    • F A Albin & Sons Limited
    • Family Funerals Trust Limited
    • Freeman Brothers (this includes Peter Christopher Freeman and Brigid Mary Freeman)
    • Golden Charter Limited (this includes Golden Charter and localfuneral.co.uk)
    • Golden Leaves Limited
    • Haven Personal Funeral Plans Ltd (this includes Haven Personal Funeral Plans and Haven)
    • Independent Funeral Planning Services Ltd (this includes IFPS and The IFPS)
    • Low Cost Funeral Limited (this includes Affordable Funerals and Memoriafunerals.co.uk)
    • M&F Funeral Services Ltd (this includes M&F Funeral Services)
    • Open Prepaid Funerals Limited (this includes Open Prepaid Funeral Plans and Open Funeral Plans)
    • Peace Burials Limited (this includes Peace Funerals)
    • Plan With Grace Limited
    • Pure Cremation Funeral Planning Ltd
    • Southern Co-Operative Funerals Limited (this includes Southern Co-op and The Co-operative Funeralcare)
    • The Independent Family Funeral Directors Ltd (this includes Fosters Family Funeral Directors)
    • William Alty & Sons Limited