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Funeral Plan guide

A Guide to Funeral Plans

A Guide to Funeral Plans

A funeral plan can help you plan the costs of your funeral in advance. The following guide covers how funeral plans function, the price, and what alternatives are available. You may have considered a funeral plan if you are unsure how family members would be able to pay for your funeral.


Funeral plans – how do they work?

Essentially, a funeral plan will allow you to pay in advance for your funeral so your immediate family or relatives do not have to take on the costs. It is important to note that as soon as you die, your family can pay for your funeral using your estate money (inheritance tax does not apply to this). Each provider will have different variations to their funeral plans, not everything is included, so make sure you compare all the features and benefits before you sign up.

Funeral plans can cover things like a church service (or other religious place of worship), limousine transportation, and viewings of the deceased. A few things that are often not included are burial plots, funeral director costs, and flowers. This means that some things will not be included within the plan, and family may be expected to cover these additional costs.

Most providers will only make a contribution towards burial and cremation costs. It is highly recommended that you check the plan details to ensure you know what you are purchasing. As an example, Age UK and Dignity cover the full cost of cremation, but will only make a contribution for any burial costs. Golden Leaves has a fixed contribution amount for burial and cremation. The Co-operative will cover all the costs involved for burial or cremation, although burial plot costs are excluded.


How much do funeral plans cost?

You have the option to purchase a funeral plan directly from a funeral director or from a funeral plan provider. Customers can either pay in monthly instalments or in full. The length of an instalment plan is normally one to ten years. If you decide to pay in full, it can be around £3,000 to £6,000, depending on the options you choose.

It’s quick and simple to get an online quote within minutes. Utility Saving Expert compares funeral plans from all the leading providers.


Is a funeral plan a safe option?

To ensure your plan is protected, the funeral provider will either place it within a trust fund or the money will be invested into an insurance policy that will be payable at the time of death. The FCA (Financial Conduct Authority) does not have direct funeral plan regulations, but there are still rules in place to protect your money, whether it is invested in an insurance policy or placed within a trust fund.

The Funeral Planning Authority (FPA) is a professional body which regulates funeral providers and members must comply with its code of conduct. As an example, the FPA itself and its members will look to cover the cost of funeral plans, should a provider go bankrupt.


Alternative options to a funeral plan

A funeral plan isn’t the only option available to you when planning how your family will cover the costs of your funeral. Below we will explore three alternatives:

funeral-plans-guide-green-bullet Life insurance policy

funeral-plans-guide-green-bullet Traditional savings accounts

funeral-plans-guide-green-bullet Money from your estate


Over 50s life insurance policy

This life insurance policy will pay out a fixed amount to your family at the time of death, although there are a few things you need to consider.

Any payable amount will not increase with inflation, this means that you may end up claiming less than the amount you have paid into the policy. Fortunately, this product is available without medical screening, this means it could be a useful option to consider for those who are unable to purchase a standard life insurance policy due to medical conditions.


Savings accounts

A savings account has the benefit of increasing your deposited money with interest (interest rates will vary). However, the increasing costs of a funeral plan may mean that you do not earn enough interest to keep up with this rise. Royal London, a life and pension specialist believe that the average costs associated with a funeral plan increased in 2015 by 4%, and stood at around £3,700.

To ensure that an immediate family member or relative has access to your savings account at the time of your death, remember to set up the account in joint names with the trusted individual.


Paying from your own estate

A funeral plan can be paid from your estate after your death. A bank or building society will have the authorisation to release funds once they are presented with a copy of your death certificate and an invoice from the funeral director.

Utility Saving Expert compares all the leading funeral plan providers. It’s quick and simple to get an online quote within minutes.

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