How safe is my money in a pre-paid funeral plan?
A provider will typically place any payments you make either into a trust fund, or invest them in an insurance policy that pays out when you pass away. The Financial Conduct Authority (FCA) has rules to safeguard your money in these places; however, it doesn’t regulate funeral plans.
You may want to check whether a provider you’re dealing with is signed up to the Funeral Planning Authority (FPA) – a professional body that (along with its members) pledges if a provider goes bust, it will look into paying for ceremonies covered by funeral plans.
Also, if you pay using a credit card then you could be protected by Section 75 of the Consumer Credit Act 1974. Under the Act, a credit card provider has to protect purchases over £100 if there’s a problem with a good or service you buy, or if the company you are buying from goes bust.