The idea of taking out a Co-op funeral plan crosses many people's minds. It offers an opportunity to reduce the financial burden on your family at a challenging time. However, while the more recognised names, such as the Co-op, offer various funeral plans, the industry has attracted some dubious participants. The good news is the industry now has the Financial Conduct Authority (FCA) regulating plans and plan providers.
Before we examine the Co-op's funeral plans, let's examine what FCA regulation brings to the table.
The Financial Conduct Authority (FCA) started regulating the pre-paid funeral plan sector on 29th July 2022. Previously, the Funeral Planning Authority provided some level of protection and regulation, helping service providers in:
- Meeting consumer needs
- Offering fair value
Under the new regulations, the following parties will require authorisation through the FCA:
- Providers - parties that enter into and administer funeral plan contracts. This includes those operating before the FCA regulations began.
- Intermediaries - those selling funeral plans to the public on behalf of providers. This includes funeral directors, will writers and other lead generators.
The list of authorised service providers consists of 26 companies and their plans. These providers make up around 87% of the funeral planning industry in the UK.
What about funeral plan providers not included in the FCA register?
Some providers chose not to apply for authorisation, and some operators didn’t receive FCA’s approval. Providers looking to exit the sector were obliged to:
- Take steps to wind down their funeral plan-selling operations
- Transfer existing plans to an authorised provider
The FCA has a list of firms that must not sell or carry funeral plans in the UK. If you have a plan with these firms, your provider should have contacted you about transferring your plan. These providers will transfer most funeral plans to other providers, and those that aren't should provide a full refund. If you have any queries regarding your funeral plan, you should contact the FCA.
What do Co-op funeral plans have to offer?
The good news is that FCA regulation covers Co-op funeral plans. When looking at funeral plans, you must know the details, specifically the covered fees and expenses. As of October 2022, the Co-op funeral plan service offers four different options:
- Gold plan
- Silver plan
- Bronze plan
- Simple plan
We will look at the individual plans in detail. But as standard, several elements are covered in every Co-op funeral plan.
Standard items included in every Co-op funeral plan
There are many issues to take into consideration when planning your funeral. As the costs continue to rise, it is crucial to be aware of the standard items included across all Co-op plans. These include:
- The choice between burial and cremation
- Care and preparation of the person who has died
- Transfer of the body 24 hours a day, within a 50-mile radius
- Support from the Co-op Bereavement Notification Service team and other professional organisations
- Option to personalise your funeral plan with readings, hymns, songs, and other elements, which the Co-op will retain until your plan is redeemed
- Family support/assistance provided by a funeral director
- Access to a private remembrance room for loved ones
- Regular contact from the Co-op with the representative arranging the funeral
- Funeral plan monthly payments can be spread over 6 to 12 months or 2 to 25 years
- You can pay the cost of the plan in full on inception
- You must pay for the plan in full before your 80th birthday
- Advice and guidance on additional products/services not covered under the funeral plan, such as flowers and newspaper notices.
As we will cover shortly, the various plans provide different services and guarantees. Still, the above options and services create the core of the Co-op funeral plan offering.
What do the individual Co-op funeral plans offer?
As we touched on above, there are four specific Co-op funeral plans Gold, Silver, Bronze and the Simple plan. There are different additional considerations for each plan.
Prices are correct as of December 2022. Pension Times is not responsible for content on external websites.
The Co-op Gold funeral plan costs £4,460, which can be paid in whole or in monthly instalments that will include interest charges. We will now take a look at the details of the Gold plan, which includes:
- Choice of two quality wood veneer coffins
- Mutual agreement on funeral details, time and date
- Flexibility on the cortege route
- Hearse and personnel required for the funeral
- Private remembrance room
- Previously defined third-party fees guaranteed
- Two limousines on the day of the funeral
- Memorial canvas or a similar item up to the equivalent value
Under the Gold funeral plan, defined third-party fees will be covered even if the prices rise in the future.
The basic cost of the Silver plan is £4,150, which you can pay in whole or monthly instalments with interest applicable. The details of the plan are as follows:
- Choice of two wood effect coffins
- Ability to choose a specific cortege route
- Mutual agreement on the date and time of the funeral
- Prearranged appointments to visit a private remembrance room
- Co-op personnel available to carry the coffin
- One limousine on the day of the funeral
As with the Gold plan, all pre-defined third-party fees are covered, even if there are future increases.
The base cost of the Bronze funeral plan is £3,735, which can again be paid in full or via monthly payments, including interest. The specific details of this plan are as follows:
- Wood effect coffin
- Cortege route will be direct to the crematorium/place of burial from the funeral directors
- Restricted dates and times for the funeral, typically Tuesday to Thursday before 10:30 am or after 3 pm
- Visits to the private remembrance room restricted to regular working hours
- Co-op personnel available to carry the coffin
- Cremation fees guaranteed
- Maximum contribution of £1,000 towards defined third-party fees (increased in line with inflation)
As you can see, there is a cap on the maximum contribution towards defined third-party fees. Therefore, those arranging the funeral must pay additional third-party fees above and beyond this maximum contribution.
The base cost of the Simple plan is £3,225, which can again be paid in total or monthly, incurring interest. This plan includes the following:
- A basic coffin
- A direct route to the crematorium/place of burial from the funeral home
- Choice of local crematorium (unless burial has been chosen) is down to the Co-op
- Restricted dates and times for the funeral, usually Tuesday to Thursday before 10:30 am or after 3 pm
- Visits to private remembrance room must be prearranged within regular working hours
- A maximum contribution of £850 towards defined third-party fees (increased in line with inflation)
Even though the Simple plan offers significantly less than the Gold plan, we are still talking in the thousands of pounds. Consequently, it is crucial to be aware of what is being provided by your specific choice of plan. In addition, the reduction in guaranteed third-party fees could leave family and friends with significant additional payments.
Pricing and details of all plans are correct on 20th October 2022. Pension Times is not responsible for content on external websites.
When does funeral cover start?
You will be covered from day one if you pay your plan in full. However, if you spread the cost over 6 to 12 months or 2 to 5 years, there are issues to be aware of.
Death within 12 months of the start of your plan
If you die, of natural causes, within 12 months of the start of your plan, your representatives will have two options:
- Pay the balance of the plan to secure the funeral
- Cancel the plan with payments returned less a £125 cancellation fee
However, if your death is accidental, the Co-op will provide a funeral service at no additional cost.
Death after 12 months with balance payments remaining
The Co-op will provide a complete funeral service if you are up-to-date with your payments, and death by natural causes occurs after 12 months of taking out the plan. So long as your payments are up-to-date, your loved ones will not be obliged to pay the outstanding balance on your plan. There is also the same commitment if you die from accidental causes 12 months or more after taking out your plan.
Unfortunately, many people will experience financial difficulties, which may impact their ability to cover monthly funeral plan payments. The Co-op is relatively flexible about missed payments, and cancellation is not the preferred option.
Payment over 6 to 12 months
The Co-op may cancel the plan if you miss three consecutive monthly payments. After that, there would be a £125 cancellation fee with your payments returned.
Payment over 2 to 25 years
The Co-op can cancel the plan if you miss three monthly payments within five years. Upon cancellation, the Co-op refunds your contributions to date, less a cancellation fee of £150.
Covering missed payments
With the longer-term repayment plan, there is the option to cover missed payments in the event of death within 12 months from the commencement of the plan. In this situation, the Co-op would not collect the balance due and funeral services would be supplied as agreed.
Charges not covered by Co-op funeral plans
It is only when you begin to look at the various elements of a funeral that you realise the complexity. While Co-op funeral plans can offer great assistance towards the cost and organisation of a funeral, not all charges are covered. Therefore, you should be aware of any additional charges when discussing your plan and before signing up.
Some, but by no means all, of the charges not covered by funeral plans include:
- Additional local authority charges if the funeral is taking place at weekends, on public holidays or outside of regular working hours
- Removal of medical devices or prostheses before burial
- Transport over 50 miles when bringing the body into Co-op care
- Funeral processions above 20 miles
- Maintenance, removal and additional wording on an existing headstone
In some cases, where the capped charging element is not fully used for cremation expenses, the additional funding can be used for other official charges, like doctor's fees. It is essential to check this before signing up for your funeral plan.
Tailored funeral plans
While the Co-op funeral service offers Gold, Silver, Bronze and Simple plans, there's also the ability to create a tailored funeral plan. This will consider various charges and services that may be outside the standard offerings. It is also possible to incorporate a headstone payment plan into any tailored funeral arrangement. If you prefer to create a tailored plan, you will need to sit down with a Co-op representative to discuss your preferences and clarify any additional costs.
Understanding your Co-op funeral plans
Whether looking for a standard Co-op funeral plan or a more tailored service, it is essential not to take anything for granted. Unfortunately, many people have assumed various costs have been covered in full, only to be presented with additional charges at a tough time. Therefore, you should always ensure you understand what the plan covers.
Luckily, as Co-op funeral plans fall under FCA regulation, you can always contact the Financial Ombudsman Service if you have any issues with your plan.