The FCA has regulated pre-paid funeral plans since July 2022 when it brought their provision and distribution within the regulatory perimeter. The change required providers to seek FCA authorisation or withdraw from the market, gave customers access to the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS) and imposed a range of conduct rules, such as a ban on commission payments to intermediaries.  

Pre-paid probate plans, offering customers a similar promise as a funeral plan but in relation to the administration of someone's estate when they die, remain outside the scope of regulation. However, they arguably pose similar risks to consumers and the FCA has recently warned customers to consider carefully whether such products meet their needs and offer value before buying.

The FCA has emphasised that it does not regulate pre-paid probate firms or the pre-payment of probate costs and highlighted the main consequences for consumers, including the lack of FOS or FSCS protection, the potential for commission payments inflating the price of a plan and the absence of any requirements for money paid into plans to be held in trust or backed by insurance. 

The FCA notes that it has seen increased marketing of pre-paid probate plans in recent months, including from firms and individuals associated with funeral plan firms that did not become authorised. 

While pre-paid probate plans remain outside the FCA's remit for the present, the FCA nonetheless makes a number of recommendations for consumers to bear in mind (such as being alert to high-pressure sales tactics, considering whether probate is likely to be needed in the first place and if appropriate making a report to Trading Standards). Given the similarities between the pre-paid probate market and the pre-paid funeral market before July 2022, there is likely to be continued monitoring of the sector and potentially increased calls for regulation.