The cost of funerals has been increasing year on year and this is due to a number of reasons, including limited burial space and a rise in fuel prices. Whatever the reasons, the cost of the average funeral has doubled since 2004. In 2018, the average cost was £4,200 and it’s predicted that this could rise to over £5,100 by 2023*.
What if there was a way to control the cost of your funeral and pay for some of the main aspects of it in advance? This could prevent your family from having to cover some of the larger costs associated with a funeral during their time of mourning. Taking out a funeral plan is one of the best ways of doing this.
A plan can be taken out by anyone, provided they meet the age requirements laid out by the plan provider, and is a wonderful way to pay some of the funeral costs in advance.
How do prepaid funeral plans work?
A funeral plan allows you to pay something towards your funeral to alleviate some of the cost from your family members and friends. The plan is set up and the cost is spread out over a specified period of time, though the plan and cost will depend on the provider. For example, the Age Co funeral plan allows you to pay for the arrangement in one lump sum, over 12 months or over up to 25 years with an additional admin fee.
One of the biggest benefits of a funeral plan is that the price doesn’t go up with inflation. The price that you’re quoted when you start paying into your plan will likely stay the same, even if you spread the cost over 10 years.
With a plan, there’s no nasty surprises for your loved ones once you’ve passed, as a lot of the bigger costs will be covered. Otherwise, your family may need to get thousands of pounds together in a short space of time, something that could be particularly difficult when they’re mourning. Depending on the type of arrangement you take out, the kinds of costs that might be covered include funeral director, cremation and minister’s fees.
With some providers, the money that you pay into your plan will be kept in a trust until it’s needed. With others, the money will be kept in a whole-of-life (WOL) policy. Your plan can be shared with friends and family so that they’re aware it exists.
Funeral plans are worth it because it isn’t just some of the costs that have been considered in advance. Some providers may offer specialist advice on organising a funeral, as well as free telephone bereavement advice for your friends and family once you’ve gone.
If you don’t take out some form of prepaid funeral arrangement, your family may struggle to know what kind of service you want and will need to fork out the cost themselves. Some people believe that they can use a policy payout from life insurance to pay for a funeral. While this is an option, the funeral could end up being significantly more expensive than if you’d paid into a plan and your family would be left to organise the entire event while they’re grieving.
How much does a prepaid funeral cost?
As already discussed, having a funeral plan will essentially lock the price of your funeral. It cannot increase with inflation and you can even keep your arrangement when you move house. A house move could result in having a service at a different location, but a plan means that the cost of the services in your plan remains the same. Just be aware that some providers may charge an administration fee for changing the address on your policy.
The price of a prepaid funeral will depend on the provider you choose. Most will start from around £2,800 and go up to around £4,000 depending on what you require.
It’s worth noting that not all costs can be covered in a funeral plan. Plans of this kind cover the physical cremation or burial, including a coffin, a hearse and the service itself. However, catering, venue hire for the wake, flowers and headstones will all cost extra. Before purchasing a funeral arrangement, you should read all the small print so that you fully understand exactly what is and isn’t included. Every provider will include different features, so think carefully about what you want and ensure that the funeral plan you choose includes it.
