Funeral plans

Planning and Paying for Your Funeral – How Easy it Can Be

Are you worried that you might not leave enough money for your funeral when you die? Believe it or not, you’re not on your own. If you’re concerned that those making your funeral arrangements will be left with the bill, a funeral plan provider might have the answer. 

A funeral plan allows you to arrange and pay for your funeral in advance. Additionally, it gives you peace of mind that most of the costs will be taken care of and your wishes respected. 

Find out more in this post. 

Planning Your Funeral

One of the easiest ways to plan for your funeral is to write everything down and tell someone you’ve done it. You could also give them a copy to make it easy for those you leave behind. 

If you want to ensure your wishes can be followed, you need to know how your funeral will be paid for. 

Funeral plans are a very popular option. They allow you to plan and pay for your funeral in advance. 

What is a Funeral Plan?

You can pay in advance for some of your funeral with a funeral plan. Plans are available from funeral plan providers and funeral directors.

The money you pay into the plan is solely for your funeral. The first step is to decide what you want to include in your plan. Then you pay for it with either monthly payments or a lump sum. 

It’s better to pay in one lump sum if you can afford it. That way, you’ll avoid paying interest and administration fees. 

Something else to consider is that if you die within 2 years of taking out a funeral plan and have opted to pay monthly, the amount you’ve paid may not cover your funeral costs.  

Is a Funeral Plan a Good Option?

Some pros and cons come with getting a funeral plan. You should examine the following if you want to learn whether a funeral plan is a good option for you. 

Pros

  • A funeral plan can protect against inflation.
  • The Financial Conduct Authority regulates funeral plans.
  • Funeral plans are not included as an asset when calculating Inheritance Tax
  • Typically, money in a funeral plan is not included in an assessment of savings for means-tested benefits

Cons

  • Most standard plans don’t cover all funeral costs
  • A cheap funeral plan means you’ve less control over what your plan covers
  • If the person organising your funeral wants to make changes, they’ll have to cover those costs

What Does a Funeral Plan Include?

The cost of a funeral plan varies depending on your preferred funeral. However, all plans include the services of a funeral director. The funeral director takes care of the deceased, arranges the funeral, and organises transport of the body to a place of rest. 

Things that may affect the cost of your funeral include:

  • The type of ceremony and funeral you’d prefer
  • The type of coffin you want
  • The provider
  • Where you live in the UK

Funeral plans range from £2500 to £5000 if you pay in one lump sum. A cremation plan will likely be cheaper than a burial plan, and if you choose direct cremation without a ceremony, the cost of a funeral plan could be as low as  £1500.

Is a Funeral Plan Safe?

From July 2022, all companies selling pre-paid funeral plans are regulated by the Financial Conduct Authority. This means a funeral plan is very safe because:

  • Your money is held in trust or as a whole life policy. This means it’s safe and protects you from inflation. You’ll never get back less than what you paid in.
  • The plan you’ve paid for meets your needs at a fair price.
  • You’ll be given all the information you need to make an informed decision. 

In addition, you have the right to complain to the Financial Ombudsman Service if you’re unhappy, have access to the financial protection offered by the Financial Services Compensation Scheme, and get the service you paid for.  

How to Buy a Funeral Plan

You can pick a funeral plan provider from a list of authorised providers on the FCA website. You can also find and compare providers and plans by researching online. 

When looking at your options, watch out for extra fees, as not all providers include commission and administration fees in the final cost. In addition, read the terms and conditions carefully, to ensure the details are right and that you’re covered. 

Other Ways to Financially Plan for Your Funeral

A pre-paid funeral plan is not the only way to ensure your loved ones don’t have to cover the cost of your funeral. Alternatives you might want to consider include:

  • Regular life insurance
  • Putting money into a savings account
  • Checking death in service employment benefits
  • Over-50s life insurance plans
  • Leaving money behind in your estate

Now you can see how easy it is to plan and pay for your funeral, there’s no time like the present to get things underway.

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