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Written by Adam McIlroy.
13 minute read
Article reviewed by Helen Hardware, Former Head of Risk & Compliance at Aura on March 5, 2025.
Perhaps the most frequently asked question we are asked from people seeking a funeral plan is, “Are funeral plans safe?”. Above all, the most important factor in considering a funeral plan is whether or not that provider can be trusted. If you can’t trust that your money will be safe with the provider you choose, then how can you enjoy the peace of mind and the other financial benefits that come with them?
It would be remiss of us not to acknowledge the negative publicity that funeral plan providers have received in recent years. We understand that many of the families we have spoken to have had concerns about this and wanted extra reassurance that we will deliver on the promises that we make. But please don’t worry; we aim to answer the question of whether funeral plans are safe in the following article and set your mind at ease.
Key takeaways:
Until very recently, the funeral plan industry was not regulated by the Financial Conduct Authority (FCA). But, as of 29 July 2022, shortly after the high-profile collapse of a large, UK funeral plan provider, the FCA started to regulate our industry. This required every organisation selling funeral plans to be regulated and authorised by them. There are a number of important benefits for you as a result of this regulation.
Funeral plan providers are now required by law to protect the money you give to them for a plan. One way they can do this is by keeping it in an independently-managed trust. With Aura Funeral Plans, this means the money held within the trust is looked after by a board of trustees who are independent from Aura.
There is now an industry-wide ban on cold calling, meaning that funeral plan providers cannot make unsolicited calls to people for the purpose of selling a funeral plan. It means that the only way you’ll be speaking to a funeral plan provider is if you’d like to start the conversation yourself.
Intermediaries in the industry, such as will writers or independent financial advisors, are banned from earning commissions on funeral plan sales. Furthermore, sales staff at funeral plan providers are required to ensure that they are not mis-selling products to customers. The customer must be provided with clear and sufficient information that enables them to make a decision on which is right for their needs. This means that you can trust you will be getting a plan that actually suits your needs, and which is right for you, rather than with any unnecessary and pricey extras.
Companies selling funeral plans are now legally obliged to deliver the funeral you pay for in your plan. In a situation where someone is paying for a funeral plan over a period longer than two years, and they die after two years of payments have been made, but before the full plan has been paid up, then the provider still needs to honour the plan regardless. If something happens to the company you’ve bought a plan from which means that they can’t deliver a funeral themselves, they must either refund you or transfer your plan to another provider. Furthermore, an FCA requirement for funeral plans is that the purchase needs to have a 30-day cooling off period in which it can be cancelled for free by the buyer. Currently, with Aura, you can cancel any time, for any reason and still receive a full refund.
Many find that buying a funeral plan allows them to combat rising costs. They also provide peace of mind all around: You can get the most out of life knowing that a big item has been ticked off your to-do list. And those closest to you will have peace of mind when the time comes knowing that your funeral is already paid for and that it will proceed exactly as you would have wanted. But how do funeral plans work?
The answer to this will depend on your provider. The money that’s set aside for your plan should cover most things. If, like Aura, your provider is all-inclusive, it will also cover the collection of your body from anywhere within Britain. Other providers may charge extra for these services, so make sure you understand what your plan pays for. In short, if you’ve purchased and paid for a plan when you die, your plan will be activated, and this money will then be used to pay for your funeral.
Legal & General estimates an 84% increase in funeral costs in the UK over a 20-year period. If funeral costs continue to rise at the same rate they have been, the average cost by 2033 could be £6,259. A big reason why many buy a funeral plan is to lock in today’s prices. You could buy one of our funeral plans today, starting at £1,695, and that’s all you’d ever pay, even if your plan is not activated for many years and the starting cost by then is much higher.
In the end, whether or not you buy a funeral plan is your choice, and will depend on your circumstances. For instance, if you already have a life insurance policy in place, it may not be as important to set up a funeral plan. While we can’t speak for other providers, we at Aura are more than happy for you to change your mind for any reason at any time. So if you decide to make any changes or would like to cancel, there are no fees for doing so.
Aside from the benefits of the FCA regulation mentioned above, there are other advantages available to you, such as access to the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS). The FSCS allows you to seek compensation in the unlikely event that your provider were to go out of business. Whereas the FOS gives you an escalation route to an impartial arbiter if you think that any complaint you might have made has not been handled satisfactorily.
The Financial Services Register is the log kept by the FCA of companies regulated and authorised to sell financial products and services in the UK. Funeral plan providers were required to apply for registration with the FCA some time ago. If they missed the deadline, they had until 31 October 2022 to transfer the plans under their management to an authorised provider. If you would like, you can see the FCA’s website to check that your chosen provider is registered.
Thanks to FCA regulation, if we are unable to deliver on your funeral then we are legally required to fully refund the money you’ve paid, or transfer your plan to a different provider who can deliver on it.
In the unlikely event that Aura were to go out of business, the fact that your money is placed into an independently-managed trust means that you are fully protected. You can either seek a full refund if this happens or have your plan transferred to a new provider.
Over-50s life insurance and a funeral plan are two different kinds of financial products, so this really depends on what your needs are. A life insurance payout when you die can go towards funeral costs, but it’s not necessarily designed for this purpose.
Many people looking online for what insurance covers funeral costs or searching for insurance for covering funeral costs will come across over-50s life insurance policies. These are often marketed as a way to help with funeral expenses, though they may not always provide enough to cover everything, especially as prices rise.
Depending on the policy, it usually provides a lump-sum payout to your chosen beneficiary after you’ve died, but it may not be enough to cover the full cost of your funeral. Or, you may have other intentions in mind for it, like leaving it as a gift to friends or family. A funeral plan is purpose-built for paying the cost of your funeral, and it can’t be used for any other reason. There’s nothing stopping you from having both, of course. Insurance providers in the UK, like funeral plan providers, need to be registered with the FCA.
We hope that reading this article has reassured you and answered the question, “Are funeral plans safe?”.
At Aura, we pride ourselves on high ethical standards: We are not merely the only direct cremation plan provider with two plan options rated at five stars by independent experts, Fairer Finance. We won the SME Compliance Team of the Year award at the ICA Compliance Awards 2024. We have worked hard to develop a reputation for trustworthiness, which is one of the reasons we are the highest-rated ‘Cremation Services’ provider, rated at 4.9 stars by customers on Trustpilot.
If you are interested in learning more about the particular benefits of Aura’s own funeral plans, read more here. Alternatively, you can get in touch by calling or writing to us; we’d be delighted to hear from you.
If you’d like to know more about how to plan a cremation with Aura, our brochure is a helpful place to begin.
Our funeral plans are a helpful way to put everything in place for you or someone else.
When the time comes, our experienced team will be here to guide you through each step, offering support and advice whenever you need it.
To find out more about how our plans work, what’s included, and our story, you can request a brochure by clicking the link below. We will then send you a copy by email or First Class post—whichever you prefer.
Yes—if the provider is authorised by the Financial Conduct Authority (FCA). Since July 2022, all UK funeral plan providers must be FCA-regulated. This means your money is protected, cold-calling is banned, commissions are outlawed, and providers are legally obliged to deliver the funeral you’ve paid for.
With regulated providers like Aura, your money is held in an independently-managed trust. This means:
Aura cannot access the money unless it’s used to provide your funeral
If Aura went out of business, your money remains protected
You may be eligible for a refund or plan transfer if services can’t be delivered
The FCA (Financial Conduct Authority) regulates funeral plan providers to ensure:
Clear and fair sales practices
No cold-calling
No hidden fees or commissions
Money protection through trusts
Plans must be honoured or refunded
Always check your provider is listed on the FCA Financial Services Register.
If your provider is FCA-regulated, your money is protected. You have the right to:
A full refund, or
A transfer of your plan to another provider
You may also be covered by the Financial Services Compensation Scheme (FSCS) in rare cases.
Yes. Under FCA rules, every plan must come with a 30-day cooling-off period. Aura offers more flexibility—you can cancel any time for a full refund, with no cancellation fees.
They can be. A funeral plan lets you lock in today’s prices, protecting against rising funeral costs.
It depends on the provider. Aura’s plans are all-inclusive, covering:
Cremation fees
Doctor’s paperwork
Collection and care
Return or scattering of ashes
Other providers may charge extra, so always check the details before buying.
They serve different purposes:
Over-50s life insurance pays out a lump sum, but it might not cover full funeral costs.
Funeral plans are purpose-built to pay for a funeral and can’t be spent elsewhere.
Many people choose to have both—for funeral cover and to leave a gift to loved ones.
Yes. Most providers allow anyone over a certain age (usually 18+) to buy a plan. Aura’s plans are open to all adults in mainland Britain, and can be paid as a lump sum or in monthly instalments.
With Aura, you can cancel your plan at any time, for any reason, and get a full refund. We never charge cancellation fees or tie you in.
Look for:
FCA authorisation
Positive customer reviews (Aura is rated 4.9/5 on Trustpilot)
Independent recognition (Aura has two 5-star rated plans from Fairer Finance)
Awards or compliance recognition (Aura won SME Compliance Team of the Year 2024)
Trust and transparency matter most—don’t be afraid to ask providers for proof of regulation.