Why the Funeral Payment Was Only £120

Yes, that is really the rule. If the person who died had a pre-paid funeral plan, the Funeral Expenses Payment does not add its usual contribution towards the funeral. In England and Wales it adds only up to £120 for items the plan did not cover. The small award is not a mistake, an oversight or a sign that your claim was mishandled. It is the pre-paid plan cap doing exactly what it was written to do.

It feels wrong because the £120 bears no relation to what a funeral costs, and because the plan you are being told "already covers it" may not have covered nearly as much as you assumed. Both of those feelings are reasonable. But the DWP's logic is narrow: once a funeral plan exists, the department treats the funeral itself as provided for and steps in only for the gaps around the edges.

Source: GOV.UK, Get help with funeral costs (Funeral Expenses Payment): What you'll get, which states that where the person who died had a funeral plan, only up to £120 is payable for items not covered by that plan.

The short answer: a plan caps the payment

Without a funeral plan, a successful Funeral Expenses Payment covers the necessary costs of a burial or cremation, plus a capped contribution towards other expenses such as the funeral director's fees, a coffin and flowers. With a pre-paid plan in the picture, that structure collapses to a single small figure: up to £120 for anything the plan did not include.

The reasoning is that the plan has already been bought and paid for, so the state should not pay a second time for the same funeral. Whether that reasoning holds up in your case depends entirely on what the plan actually bought — which is the part worth examining closely, because plans vary enormously and the cap does not.

Why the amount is £120 and not more

The cap is deliberately blunt. It does not scale with the value of the plan, the cost of the funeral, or the size of the shortfall. A person could hold a minimal plan that paid for very little, and the DWP would still limit the extra help to £120, exactly as it would for someone whose plan covered almost everything.

That bluntness is where the unfairness bites. The rule assumes a funeral plan is a comprehensive product that leaves only small extras to find. In reality many older plans, and some cheaper modern ones, are far narrower than that. The cap treats a bare-bones plan and a full one identically, and the family with the bare-bones plan carries the difference.

By contrast, where there is no plan at all, the payment for other expenses is capped much higher — a distinction we set out in detail in our guide to the separate cap that applies to other funeral expenses when there is no plan. Understanding that difference helps explain why a plan, counter-intuitively, can leave you worse off with the DWP than having no plan at all.

What the plan was — and was not — covering

This is the paragraph to slow down on, because it is where most of the answer lies. A funeral has two broad kinds of cost. There are the funeral director's own services — collecting and caring for the body, the coffin, the hearse, staff on the day. And there are disbursements: the third-party fees the funeral director pays out on your behalf, chiefly the cremation or burial fee, the doctors' fees for cremation where they apply, and the fee for a minister or celebrant.

Older and cheaper pre-paid plans very often fix a fixed allowance towards disbursements, or exclude some of them altogether. Because disbursements rise over time, a plan bought years ago may fall well short of today's cremation or burial fee, leaving the family to top it up. So the "plan that covers the funeral" can, in practice, leave a real bill outstanding — and the DWP's £120 is all it will add towards it.

Read the plan schedule line by line. Look specifically for the words "disbursements", "third-party costs", "cremation fee" or "interment fee", and for any phrase such as "up to" or "a contribution towards", which signals a capped rather than a guaranteed amount. What the plan excluded is exactly what you are now being asked to find, and it is the concrete figure to work out before you decide whether the £120 was calculated correctly.

There is a second layer to check. Even where a plan does cover disbursements, it often does so through a fixed allowance set at the price when the plan was taken out. If the cremation or burial fee has since risen — and these local-authority and crematorium fees tend to rise every year — the allowance no longer stretches to the current fee, and the difference falls to the family. So a plan can be described as "covering disbursements" and still leave a bill. When you ring the funeral director, ask them to itemise which costs the plan settled in full, which it part-paid, and which it did not touch. That breakdown, in writing, is what tells you the true size of the gap the £120 is being set against.

Was the award worked out correctly?

In most cases the £120 is right, however unwelcome. The cap is mechanical, and if the person genuinely held a pre-paid plan, that is the figure. But there are a few things worth checking before you accept it.

First, was it actually a pre-paid funeral plan, or something else? A life insurance policy, an over-50s plan that pays out a cash lump sum, or a savings pot earmarked for a funeral is not the same as a pre-paid funeral plan, and does not trigger this particular cap in the same way. If the DWP has treated a cash policy as a funeral plan, that is worth querying. Second, confirm the £120 was added for the items the plan did not cover, rather than nothing at all. If you think the decision is wrong on the facts, you can ask for a mandatory reconsideration and set out what the plan did and did not include.

If you do ask for a reconsideration, send the plan schedule, the funeral director's itemised account, and a short note pointing to the specific costs the plan did not meet. A decision-maker cannot see what the plan excluded unless you show them, and the more precisely you can name the uncovered items — the crematorium fee, a doctor's fee, the celebrant — the easier it is for them to see that the £120 was set against a genuine, evidenced shortfall rather than a hypothetical one. Ask for the reconsideration within one month of the decision letter, because that is the ordinary time limit.

Free help with challenging a decision is available and does not cost anything. Citizens Advice can look at the plan schedule with you and help you put a reconsideration together, which is worth doing before you assume the figure is final.

Do not let a pending benefit decision hold up the claim

One practical trap sits alongside all of this. Entitlement to a Funeral Expenses Payment depends on you or your partner receiving a qualifying benefit, and the claim itself has a deadline that runs from the funeral. If your qualifying benefit has not yet been decided, do not wait for it before claiming — the funeral deadline does not pause while another decision is outstanding. We explain the timing in why you should claim the funeral help even while a benefit decision is pending.

It is also worth knowing that the closest-relative rules can defeat a claim regardless of the plan. If the DWP regards someone else as a nearer relative of the person who died, your claim can be refused even where you paid for everything, a problem we cover in the closer relative rule that defeats funeral grant claims. And for the fuller mechanics of how a plan reduces the grant, see how a pre-paid plan cuts the state funeral grant to £120.

Scotland and Northern Ireland

The £120 figure is an England and Wales rule, and it does not read across unchanged.

In Scotland the equivalent is the Funeral Support Payment, run by Social Security Scotland. It also reduces the award where a pre-paid funeral plan exists, but the reduced amount is set under its own rules and differs from the DWP figure, and Scotland uses a wider list of qualifying benefits. If you live in Scotland you apply to Social Security Scotland rather than the DWP, so make sure you are looking at the Scottish scheme's amounts and not the England and Wales ones.

In Northern Ireland the payment mirrors the Great Britain scheme, including the treatment of funeral plans, but it is administered by the Department for Communities and claimed through nidirect. The office is different even though the substance is close.

Closing the gap a plan leaves behind

The uncomfortable lesson many families take from a £120 award is that a pre-paid funeral plan is not the complete answer it is often sold as. A plan fixes the funeral director's core services at today's prices, which is genuinely useful, but it frequently leaves disbursements, rising fees and the wider costs of a bereavement uncovered — and it removes almost all of the state help that would otherwise have been available.

That is why some people prefer, or add alongside a plan, cover that pays out a cash sum the family can use for whatever the funeral and the weeks around it actually cost — the shortfall on disbursements, the wake, the time off work, the bills that do not stop. If that is the gap you have just discovered, you can compare life insurance quotes through an FCA-authorised broker and have the amount matched to a realistic funeral cost rather than an optimistic one. What an insurer offers, and on what terms, depends on underwriting, so it is not a guaranteed acceptance — but it is the usual way to make sure the next family is not left finding the difference.

For the fuller picture of what the state does and does not pay after a death — the deadlines, the caps, the benefits that stop and the ones you have to claim yourself — our guide to bereavement benefits and state support pulls the separate schemes together in one place. The Funeral Expenses Payment is only one strand of it, and a £120 award is a reminder of how little of the burden the state expects to carry.

Frequently asked questions

Why was my award only £120?

Where the person who died had a pre-paid funeral plan, the rules cap what the DWP adds for other expenses at £120 in England and Wales. The reasoning is that the plan already provides for the funeral, so the payment covers only extras the plan leaves out. It is a fixed cap, not a calculation error, and it applies however large the actual shortfall turns out to be.

Does it matter what the plan actually covered?

For the cap itself, no — the £120 applies whether the plan was comprehensive or minimal, so a limited plan can leave a wide gap. But what the plan covered matters enormously to you, because disbursements such as the cremation fee, doctors' fees and the minister are sometimes excluded, and the family then has to pay them. Read the plan schedule carefully to see exactly what you are left to find.

Is Scotland different?

Yes. Funeral Support Payment is run by Social Security Scotland under its own rules, with a different reduced amount where a funeral plan exists and a wider list of qualifying benefits. If you live in Scotland, apply to Social Security Scotland rather than to the DWP, and check the Scottish scheme's figures rather than the England and Wales ones.