The Good Funeral Guide Blog

There’s an unpleasant odour emanating from somewhere..

Thursday, 16 February 2017

Back in 2015, we reported on this blog about the legal skirmish between funeral plan providers Safe Hands Funeral Plans and Golden Charter – see here to refresh your memory. 

A paragraph from that blog post came to mind today:

‘While the lawyers order trebles all round and get ready to enwrap both parties in litigation for as long as legally possible, the good citizens of Funeralworld tremble. A lot of heavily soiled linen looks like being washed in public. God forbid that the public learn just how much of the money they spend on a funeral plan gets divvied up among sundry predators in the form of commissions, sales and marketing costs, directors’ wages, you name it.’

Well, thanks to the wonderful world of t’internet, that very information is now available in an easy to read table, showing just how much money is taken out of the total cost of a funeral plan in non-funeral related fees. Thanks to John Taplin from Open Pre-Paid Funerals Ltd for providing this link. 

Have a look here

Or, for a quick précis, we’ll summarise a couple of the lesser known facts listed in the table for you. 

  • The main providers of UK pre-paid funeral plans, namely Dignity, Golden Charter*, Golden Leaves, Avalon and Safe Hands will extract between £785.00 and £1,500.00 in ‘admin fees’ from the total amount you pay them. (Co-operative Funeralcare don’t publish the amount they charge). Editor’s note: *We have been reliably informed that where Golden Charter plans are purchased directly from a funeral director, the administration fee is much lower and the only deduction from the money you pay is £249.00.
  • If you buy a plan provided by one of those five companies from an agent working on their behalf (this could be a solicitor, a will writer, a financial advisor, a funeral director etc) then a commission payment of up to a figure between £500 and £600 is paid to them. (Co-operative Funeralcare don’t use agents, their plans are only available directly, or from their branches).
  • The money set aside within the plans provided by those five companies to cover the third party costs (crematorium fee, doctors’ fees and officiant’s fee or a contribution towards burial costs) ranges between £940 and £1,200. Co-operative Funeralcare don’t specify the amount set aside towards disbursements in their plans.
  • The value of the growth per annum of each plan is not published by any of the six plan providers listed above.
  • The growth of value of the amount set aside for third party costs for each plan is that of the Retail Price Index for five of the plan providers. Golden Leaves use the Consumer Price Index.

So, it is entirely possible that the money you pay in good faith for a funeral plan, thinking that you’re addressing the ever more hysterical annual announcements of the rising costs of funerals escalating beyond comprehension yet again, will in fact be whittled down to the bare bone when death occurs and the funeral needs to be arranged. A pocketful of cash here, a handful of cash there, all disappearing from that plan price in the direction of administration and commission before the ink is even dry on the medical certificate of the cause of death.

As an example, we were told this week about a funeral director receiving a call from one of the funeral plan providers listed above. The plan provider invited the funeral director to carry out a funeral for a plan holder who had just died. The plan holder had paid £3,595 for their funeral. It included all the traditional aspects of a funeral, collecting and caring for the person who had died, providing a coffin, dressing them and providing chapel visits, all professional assistance with the funeral, providing a hearse and a limousine and the third party costs.

So far so what, you might think. £3,595.00 sounds about ok for what is being provided?

Well, the amount that the funeral director was offered for undertaking this funeral was actually £2,445.00.

And, of that £2,445.00, £1,100.00 was allocated for the third party costs. In fact, the third party costs totalled just under £1,200.00.

So the funeral director, the one actually doing the funeral, was effectively invited to do so for £1,245.00.

That’s just £145 more than the £1,100.00 that had whistled out of the original payment to persons unknown in administration fees and commission payments.

The funeral director concerned politely declined the offer. They couldn’t make the sums add up.

The person who paid £3,595.00 for their plan and who died thinking their funeral was all sorted is none the wiser. Their family is probably none the wiser. The plan provider may have found a funeral director willing to carry out this funeral for £1,245.00 and nobody will be any the wiser. 

We think it stinks.

There is a whole can of worms writhing underneath the label of ‘Funeral Plans’. Thousands are sold each year to unwitting purchasers who want to are seduced by lines such as ‘We Believe Your Loved Ones Shouldn’t Be Left With Any Surprise Bills’ (capital letters not our own), or ‘A pre-paid funeral plan from the UK’s largest provider ensures peace of mind for you and your family’. There’s a very nice living to be made from selling funeral plans offered by the big six providers, but not such a good one from carrying out the actual funerals involved.

If you are thinking about planning your funeral in advance, do your homework. The only plan provider that we rate is Open Pre-Paid Funerals Ltd. So highly do we rate them, we have developed our own, unique alternative to funeral plans in partnership with them. It stands apart from every other offering on the market.

 It’s the GFGPlan.

GFGPlan puts your interests first. There is an administrative fee of £195.00 (and £25 of that is donated to the Good Funeral Guide). Other than that, we make no deductions whatever from the money you give us to look after for you. Zilch. Not one penny is spent on salaries, nobody gets a commission, and there are no free pens.

Read about it here.

 

 

 

7 comments on “There’s an unpleasant odour emanating from somewhere..

  1. Friday 17th February 2017 at 8:46 pm

    Surely no plan provider can guarantee the rate? And who knows what RPI will be, or what return you’ll get on any investment?

    All plans involve risk, and it seems to me the person carrying most risk is the funeral director.

    A builder recently asked me about his Mum’s intended Co-op plan. During the discussion that followed, I asked him if he would allow me to pay for an extension on my house now, but he wouldn’t actually build it for twenty years and then only at the price agreed and paid today. He had a penny drops moment, he wouldn’t entertain the idea of agreeing such a deal, as he said has no idea what his costs will be in 20 years time. He believed he would certainly lose out on the arrangement and his faith in pre-paid funeral plans was certainly diminished!

  2. Thursday 16th February 2017 at 10:42 pm

    FD fees are guaranteed with Open too. And we pay the same rate of growth to disbursements which is therefore better than any other provider, and our admin fee for FD sold plans is only £195, and our cancellation fee is less than anyone else’s and there’s more.

  3. Fran Hall

    Thursday 16th February 2017 at 8:23 pm

    Hi Mark

    That’s an interesting addition – so a Golden Charter plan purchased from a funeral director loses only £249 in deductions from the full sum paid by the client, leaving the balance to grow at RPI until the time of death and then this final amount is paid to the undertaking funeral director at the time, have I got that right? Happy to add this in as an editor’s note if so.

    • Thursday 16th February 2017 at 9:16 pm

      Hi Fran

      Yes, please do correct this as it miss represents the Independent Way plan I sell. I’m not sure about RPI, I think the growth is a fixed rate (about 3.5%). Consumers should be encouraged to visit their preferred funeral director to ensure the best “deal” what ever plan provider the funeral director has made a commercial decision about.

      • Fran Hall

        Thursday 16th February 2017 at 9:44 pm

        I’ve added a note to reflect your point Mark.

        • Thursday 16th February 2017 at 9:48 pm

          Thank you. Oh and FD’s don’t get the same £500 or so from GC that agents would get.

  4. Thursday 16th February 2017 at 7:37 pm

    I am afraid this article could mislead consumers in relation to Golden Charter Plans bought directly from a funeral director. In these cases a clear administration charge of £249 is shown and is the only deduction. Part of this is also used to offset the selling funeral directors time and costs for setting up the plan. In these plans the funeral directors costs are guaranteed which offers the plan holder a significant safeguard which I don’t believe Open offer. Could we have an editorial correction please to avoid confusion about GFG Funeral Directors who work with Golden Charter.

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