Planning Ahead?
Consider a funeral plan
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
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The Society of Will Writers
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.
There are many different types of plan
out there, so do your research and pick
one that best suits your budget! For
further advice speak to an Estate Planner
regulated by the Society of Will Writers:
www.willwriters.com/members