Funeral planning may not be something that we want to dwell on but we’ll all have to face it at some point (hopefully, in the distant future).
Planning ahead for your funeral can save your family and friends much stress and heartache at a very traumatic time. There are various options and choices you’ll need to make, but with our guide you should be able to finalise everything fairly quickly and get on with your life.
- Quick funerals guide
- Reasons to think about your funeral
- Funeral plans – what are they?
- Funeral plans – what’s covered
- Other options – life insurance, pension schemes and savings
- Protection in the event of bankruptcy
- Moneymagpie’s picks of the best funeral plans
- Alternative funerals
Who will pay for your funeral? Whether you want to be buried in a churchyard, cremated or buried in a cardboard box in a field, then someone has to meet the costs. There are a shocking number of misconceptions about who pays for it though. For example, in a recent survey 32% of people thought that the church or crematorium would manage the ceremony and 12% thought that the government would cover the funeral costs of all UK citizens. Unfortunately, this is not the case.
If you leave some money or property (your estate) then the funeral costs will come out of this as a priority (i.e. before anything else). If there isn’t enough to cover the cost then your family will have to pay, and how this is split amongst different family members can be a real source of conflict. People on a low income and receiving certain benefits can apply for a Social Fund payment towards the cost; however this is unlikely to cover the whole cost and the family will still have to pick up the tab for the difference.
If you don’t have any family or an estate then the NHS pays for a basic funeral for deaths in hospital, or the local council if you die outside of hospital. This is known as a ‘pauper’s funeral’ and is likely to be quite basic.
For people receiving a war disablement pension, the Service Personnel and Veterans Agency may pay for the funeral (or a contribution). It is also worth checking if there are any applicable charities (for example, for people of certain occupational backgrounds) that will make contributions to funeral costs.
People are usually buried in a churchyard, council/ private cemetary, on private land or woodland, or cremated. Cremations tend to be cheaper than burials but still come to quite a bit.
1. Funerals are surprisingly, even shockingly, expensive. And that’s not all- they are going up in price year-on-year. According to Mintel figures the average cost of a funeral in 1997 was £1,230, in 2007 £2,269 and it’s projected to go up to an astounding £4,186 by 2016. Remember too: this is the average cost, so don’t expect anything glitzy for these prices. Funeral plans give you a chance to fix the cost at today’s prices.
2. And it’s not just about the money. It may be that you have very definite ideas about your wishes when you’re gone and you want to make sure they are carried out.
3. Planning your funeral in this way is also a gift to your loved ones: it saves stress over what you ‘would have wanted’ and avoids family arguments over money. It makes everything clear and as painless as these things are ever going to be. If you don’t have much tucked away it also prevents the funeral cost burdening your family and possibly pushing them into debt.
"prepaid funeral plan"
It’s a way of paying for your own funeral in advance of your death. All rather morbid but very sensible.
The set funeral plans come in two main types. One is where you pay the full, fixed cost of the funeral (either in a lump sum or in instalments) and the other is where you pay a monthly premium right up until you need the funeral.
The first type is a good option as you will usually pay the cost of the funeral at that time (or even a bit less). The second option doesn’t have so much to recommend it, especially if you are relatively young and in reasonable health. It is like life insurance in that you pay until you die, and the longer you live the better the insurance company do out of the deal! Also if you decide it’s not a good deal later then you can cancel but you’ll lose everything you’ve paid (or at best you’ll get your money back minus a hefty cancellation fee).
Some providers also offer a bespoke option, where you can choose each element individually. Costs for this vary dramatically depending on what you choose.
Be careful to read the terms and conditions of any plan extremely carefully. One thing that many plans don’t cover is third-party costs (for example: crematorium fees, gravedigger fees) and these can be substantial. Astonishingly, many plans don’t include any church service costs. The Co-operative plan is good for this: it includes third party costs in full.
Another thing to scrutinise is how far from the church/ graveyard transport for the coffin is included- this varies wildly from unlimited to only 15 miles, which in a rural area could leave your family out of pocket.
The cheapest way to pay for a pre-paid plan will usually be a lump sum payment. If you don’t have this kind of cash to hand (between £2,000 and £4,000 for most plans) then you can pay by monthly instalments (12–60 months usually). Watch out – the longer the period the more you will pay in interest charges.
These plans usually don’t include ashes disposal or the cost of a memorial.
Life insurance policies sometimes provide an amount for funeral costs. The problem with this is that it’s fixed and when the day comes may not be enough, and the shortfall will have to be taken out of the estate or made up by relatives. Personal or occupational schemes which provide for funeral costs usally work in a similar way.
If you have a healthy amount of savings then a funeral plan may seem like unnecessary bureaucracy. For a number of reasons we believe it’s not.Why? You should save money and so more of your estate can go to family. You may have a lot of savings now, but were you to have to go into a care home then this money could be whittled away to almost nothing.
It’s also a way of attempting to ensure your wishes are respected. It’s not just about the money because it also takes the burden of decision making about the funeral off the family. There are not really any disadvantages if you invest in a good policy. The longer the period before you need to use it, the more you benefit as the cost of funerals is rising all the time. Savings are not likely to increase in value as quickly as funeral costs inflation, especially with interest rates as their present level.
Another positive is that if you’re over 60 and not receiving Income Support, funeral plans are disregarded as capital for Pension Credit, Housing Benefit and Council Tax Benefit purposes. If the amount you receive is currently reduced because you have some savings then it makes sense to use some money for a funeral plan and enjoy increased benefit amounts.
Since 2002 there has been strict regulation of these plans by the Funeral Planning Authority (FPA). This means that the money you paid for the plan has to be secured in one of two ways: either by placement in a trust fund or a whole of life policy, which will pay for the funeral on your death. It is still worth checking what arrangements the company has for safeguarding your money and ensuring you are satisfied with these.
Co-operative Funeralcare are the market leaders and it’s easy to see why. They are the only company that ensure all third party costs are met (for example, clergy fees); however if you’re having a burial they don’t cover the cost of a plot. They are very clear in their literature and have a reputation for excellent customer care, which your family are likely to be thankful for. The other thing is that they guarantee to meet all funeral costs (even with their cheapest plan) where as many plans will only guarantee cremation costs and make a fixed contribution to burial costs.
They offer a number of payment options for the set plans- one off payment, over 12 months, 24 months and 36 months. The costs vary from £2,990 for the bronze plan to £3,620 for the gold plan. This is very reasonable but doesn’t include the cost of a grave, so if you are wanting to be buried (or cremated and interned in a grave) then you have to pay for this separately (something you can also do in advance). There’s no interest payable on the 12-monthly plan but the others cost a bit extra because of the inclusion of interest. Once you have signed up, you can’t change or add to this type of plan (for example, you can’t upgrade from a bronze to a gold plan).
The other option is to pay every month until your death or until you reach 90. This is available for people aged 50 to 80 and, to put it frankly, is better if you don’t think you have long left. There are no medical questions and as long as you don’t die within two years, it will cover the costs of the funeral in the same way as the other plans. The monthly payments vary depending on your age on entering the scheme. If you do die within two years 120% of the paymemts will be returned.
These prices exclude the London area as costs are higher. Contact the Co-op for a quote if you live in London.
They also offer a tailor-made plan where you can personalise your arrangements as much as you wish.
Of the mainstream providers Golden Charter is the only one that allows you a completely free choice of funeral director. The others offer a choice from their network. You may want to fix up a pre-paid funeral plan with a funeral director you already have a personal relationship with, maybe because you’ve dealt with them before and you were pleased with the service. This can be a good option but check very carefully what you’ll get for your money.
This is a growing industry. The Natural Death Centre has lots of ideas for alternative funerals and how to go about arranging them. It also has information about DIY/ family-led funerals (without a funeral director).
- Institute of Cemetery and Crematorium Management – searchable lists of cemeteries, natural burial grounds and funeral directors
- Veterans UK
- Age UK – their factsheet on planning a funeral can be downloaded here
- The Natural Death Centre
- Golden Leaves
- Golden Charter
Funeral planning is a thankless task but it gives you peace of mind and should be appreciated by your loved ones once you’re gone.