On 29th July 2022, the Financial Conduct Authority (FCA) started regulating the pre-paid funeral plan industry. The regulation is expected to bring higher standards to the industry and boost consumer protection.


Up to this date, pre-paid funeral plans were voluntarily regulated by the Funeral Planning Authority (FPA), a self-regulated body. The FPA did not have the power to prevent pre-paid funeral plan providers from trading, and while it did have a code of practice for its members, this code was not legally binding.


Following the Covid-19 pandemic, demand for pre-paid funeral plans has soared and since then, there has been increasing concerns about the conduct of some providers and the potential negative impact this could create on the consumer. This led to the government bringing pre-paid funeral plans into the scope of FCA regulation.


The main aim of the regulation is to achieve positive outcomes for consumers. According to the FCA website, they “want to make sure that products offered by firms meet consumer needs and offer fair value”. It is therefore important for pre-paid funeral plan providers to consider the impact of the new rules. These new rules are specified by the FCA as:


· Cold-calling will be banned: Unless the consumer has been in contact with the firm before, the firm cannot call them.

· Any commission payments to intermediaries, such as funeral directors, are banned.

· Funeral plan providers must deliver a funeral unless the customer dies within two years of taking out the plan, in which case a full refund will be offered.


Customers will now also have access to the Financial Services Compensation Scheme (FSCS), which means that consumers’ money is protected if their provider fails.


For funeral plan providers, it is important to consider any changes or adjustments, which may need to be made to ensure compliance with regulatory requirements. The whole provider should be reviewed, including internal processes, risk management and conflicts of interest. It is equally vital to ensure the complaints log is up to date.


The new rules are expected to give rise to a significant change to the pre-paid funeral plan industry, however with enhanced regulation, there will be more confidence in funeral plan providers, which should in turn alleviate the worries of consumers going forward.


For more information on how the new regulations affect you or your business please contact Robson Laidler Accountants client manager Liam Crowe via: lcrowe@robson-laidler.co.uk or call: 0191 281 8191.