Are funeral plans a complete rip-off?
The answer is probably yes. You can imagine in some circumstances where it might be a good idea. For example if a person has no close friends or family and is worried that there might not be enough money left in the pot to cover the costs of burial or cremation. But for friends and family of the vast majority covering the costs of the funeral are not going to be a problem. If you have bought a funeral plan then those that are left behind and who may have wanted to arrange something special for you are probably going to be stuck with a specified funeral director and prescriptive arrangements.
There seems to be an unholy alliance between the promoters of funeral plans and funeral directors to sell as many as possible. The reason no doubt is that they are profitable for both businesses. I think it is slightly distasteful that reputable charities like Age UK should be so actively involved in flogging products which very often are not in the interests of the elderly people who buy them. The advertising seems to trade on a mixture of fear and anxiety, and guilt about not having done the right thing. I suppose it is not surprising when you consider that it makes around £10 million a year out of funeral plans.
The next product which will no doubt be heavily promoted is pre-paid probate. No doubt similar means will be used to target the elderly. If members of your family or your friends are tempted please tell them not to bother. They will be paying a high price to have the hands of their beneficiaries tied in relation to choice of adviser and costs.
Admittedly the probate market is full of predators but there are still enough professional and fair-minded probate practitioners who will provide an excellent service at a fair fee.