Funeral Plans

The death of a loved can be a difficult time for those left behind, and it’s at this time that the grieving family will often be expected to arrange a funeral. Unfortunately, it is often at this point that the family discover the cost of dying, with funerals being much more expensive than they may have anticipated. There have been concerns in recent years that the cost of funerals has risen so sharply that they are becoming unaffordable for many people.

The Competition and Markets Authority (CMA) carried out a study into the funerals market last year and published their interim report at the end of last November. The cost of a funeral can be split into two main elements. The essential elements, such as the funeral director fees, the cost of the cremation or burial, certificates, and celebrant fees, and the optional elements such as flowers, grave markets, and venue. The study found that over the last 14 years the cost of the essential elements has grown by 6% per annum. That’s double the rate of inflation over the same period!

The CMA reported that the average price of a funeral in 2018 was £4,271. There was a 68% increase in funeral director prices over the last 10 years. A family can save around £1,000 by shopping around for a funeral provider, but in reality many people planning a funeral do not think to shop around during such a difficult and emotional time.

So, who pays these costs?

A funeral is a ‘testamentary expense’ that is payable from the deceased’s own estate. In practice it is often the deceased’s family who first foot the bill for the funeral and then reclaim this from the estate as they may not immediately have access to the deceased’s funds. This was also reported on by the CMA, who found that in 2017 there were 607,000 deaths in the UK with 513,000 funerals having to be paid by the deceased’s family.

With the costs of funerals rising so rapidly, now is a good time to consider taking out a pre-paid funeral plan. By taking out a funeral plan with a reputable provider today you can ensure that the cost of your funeral is fixed at today’s prices. This takes away any uncertainty and can alleviate a lot of the financial burden on your family.

What to look out for?

There is currently no statutory regulator for funeral plan providers. The Funeral Planning Authority (FPA) is a voluntary regulator, so we recommend purchasing from a provider who is registered with the FPA.

With some plan providers you have to use one of their funeral directors. If you have a preferred funeral director you want to use make sure you check that the provider you want to purchase a plan from will allow this.

Confirm how the plan needs to be paid and whether you have to pay interest. Make sure you also confirm how your contributions are protected and how the balance will be paid if you die before you finish paying the instalments.

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