In uncertain times, guarantee your funeral plan is safe.
Expats across Portugal are considering a pre-paid Funeral Plan, and many are wondering how they can choose a reliable funeral plan provider. While it’s not mandatory to buy a plan from a UK regulated provider, here are some important points to consider.
Since July 2022, any funeral plan provider which offers a plan with a UK funeral option, is legally required to be regulated in the UK, whether they operate in the UK, Portugal, or even Australia and regardless of where the funeral eventually takes place. For the customers of regulated plan providers, this means extra protection.
Extra Protection – NO Extra Cost
With a funeral plan from a UK regulated provider, not only do plan holders benefit from having a funeral plan which covers them in Portugal and the UK, they also receive financial protection from the Financial Services Compensation Scheme (FSCS).
You may have heard of the the FSCS, it’s the same scheme that safeguards all UK bank accounts for up to £85,000. With FSCS protection, in the unlikely event of a regulated funeral plan provider’s failure, plan holders are guaranteed to receive either an equivalent funeral plan or financial compensation at the market value at the time. The FSCS ensures that firms handle consumers’ money responsibly to deliver funeral services promised.
Trust Funds Are Not All the Same
A trust fund on its own does NOT guarantee financial protection. Many providers, both regulated and unregulated, use trusts to hold funds invested by plan holders to eventually pay for funeral services.
Thankfully, UK regulated funeral plan providers MUST have their trust funds based in the UK and must hold at least 100% of the amount it would cost to deliver the funeral when it’s needed.
On the other hand, unregulated funeral plan providers may not have a trust fund at all, or they could have trust funds that are left exposed to abuse and financial mismanagement. For example, they may not hold enough money for the funerals in the future, and some unregulated providers have their trust funds established offshore in locations like Gibraltar.
You get assurance from a UK regulated provider that they are under strict financial control rules and critically for plan holders, under the protection of the FSCS.
Bigger For A Reason
In Portugal, anyone can set themselves up and sell funeral plans. Recently, we’ve seen where that can lead. When it comes to choosing a funeral plan, look for a provider you can rely on to be operating not just next year, but for the next 20 years. Ask them how long they have been helping families and how their money is managed. Ideally, you want a provider that has a dedicated team that you can trust will answer the call and be on hand to support your loved ones.
