Pre-Paid Funeral Plan Firm Collapse Compensation

Pre-Paid Funeral Plan firms that are authorised by the Financial Conduct Authority (FCA) with plan holders protected from firm collapse by the Financial Services Compensation Scheme (FSCS).

Pre-paid funeral plans only became regulated by the FCA from 29 July 2022 with all firms required to be authorised from that date and therefore party to the FSCS. 

• If the plan provider failed before 29 July 2022, you have no protection.
• If the plan provider failed or fails after this date and was regulated, FSCS takes over.

Maximum compensation payable is £85,000 per person per firm although most pre-paid funeral plans are nowhere near this level of financial investment or risk.

What happens when Funeral Plan firm fails?

The firm should already have in place plans for another Pre-Paid Funeral Plan Firm to take over the liabilities.

If not, the FSCS will take over and:

• Organise and pay for a replacement funeral plan.
• Payable compensation to the equivalent value if an alternative funeral plan provider cannot be found.

If you die and the Funeral Plan firm has collapsed during this time, the FSCS will attempt both of the above options or pay direct for your funeral up to the cover level chosen or pay compensation to your estate to contribute to funeral costs.

Advice or No Advice?

• If no advice has been given you are limited to the FSCS compensation scheme above.
• If you were advised by a financial adviser, will writer, funeral director or other professional (after 19/07/2022), there may additional recourse via professional be adviser’s professional indemnity insurance policy or the FSCS (if the adviser has also failed).

Check Protection Now

• What does the FSCS cover?  https://www.fscs.org.uk/what-we-cover/
• FSCS and ‘Funeral Plans’  https://www.fscs.org.uk/what-we-cover/funeral-plans/

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