FCA becomes regulator of funeral plans

The Financial Conduct Authority (FCA) became responsible for the regulation of funeral plans in July 2022, following concerns about the conduct of some pre-paid funeral plan providers¹. The change brought pre-paid funeral plan providers inside the FCA's remit, meaning firms selling the plans must be authorised and consumers have access to the Financial Ombudsman Service and the Financial Services Compensation Scheme².

The FCA set out the timing of the change in its Financial Lives 2024 report, published on 16 May 2025, which states that it "became responsible for the regulation of funeral plans in July 2022, following concerns about the conduct of some pre-paid funeral plan providers"¹. The same report notes that the survey fieldwork ran between 5 February 2024 and 16 June 2024, with 17,950 adults taking part¹.

Under the arrangements described by Which?, consumers with a pre-paid funeral plan are covered by the Financial Services Compensation Scheme if their provider goes bust, up to £120,000, and can escalate complaints about funeral plan providers to the Financial Ombudsman Service². Pre-paid plans let people pay upfront or in instalments, with the cost of the funeral fixed at the prices in force at the time of purchase².

The FCA's Financial Lives 2024 report also records wider consumer data gathered in May 2024, including that 13.1 million adults had low financial resilience, 24% of all UK adults, which it says was not statistically different from May 2022 (24%, 12.9 million)¹. It found 26.4 million adults had characteristics of vulnerability in May 2024, 49% of all UK adults, a decrease of 0.9 million since May 2022 (52%, 27.3 million)¹. The number of adults holding a current account rose to 52.5 million, up from 50.8 million in 2022, with the unbanked population falling to 0.9 million from 1.1 million¹.

Why it matters for households

Before July 2022, pre-paid funeral plans sat outside the FCA's rules. Since that date, providers have been subject to FCA regulation, which means households that hold or buy a plan deal with a regulated firm, and complaints can go to the Financial Ombudsman Service². If a provider fails, the Financial Services Compensation Scheme covers plan holders up to £120,000². The FCA has not reported a figure for how many plans are in force or how many providers are authorised in the information available here.

What happens next

The FCA says it will make the 2024 survey data available through GeoDS by September 2025¹. No further regulatory changes to funeral plans are set out in the information available here.