MISS MONEYSAVER: The funeral plans that WON’T rip you off as families face going into debt to give loved ones a proper send-off
When the sun is out, the flowers are in full bloom and the birds are singing, it feels wrong to discuss the cost of dying.
But after reading a recent report into the rising price of even the most basic funeral, I think it is a conversation that families should be having.
According to the SunLife findings, a traditional send-off will set you back close to £9,200 when you factor in the funeral (averaging £4,794 for a burial and £3,673 for a cremation), plus a memorial, wake, flowers, catering and fees to administer the estate.
Perhaps, like David Bowie, you feel that a simple cremation with no service would suffice.
This would cut the cost to £995 with firms such as Distinct Cremations and Aura Cremations or £1,295 with Pure Cremations. Some offer instalment plans, starting from just over £10 a month.
A traditional funeral costs an average sum of £9,200 including £4,694 for a burial or £3,673 for a cremation, research from SunLife shows
It’s not surprising that, given the pressures on family budgets, a growing number are opting for something unfussy like this, leaving it up to family and friends to follow the cremation with a ‘celebration of life’ at home or a local venue.
Maria Bailey, founder of GriefSpecialists.org says: ‘If your loved one has chosen a direct cremation and you’re not sure how to celebrate their lives, think about how you can still come together to share memories.
‘Having the rite of a funeral removed can feel like you’ve been robbed. Think about how you can create your own alternative that is personal to you and your family.’
If you are not bothered about a funeral, tell your family, especially if your estate will not have much money to pay for it.
Research last year by Farewill, found that more than four in ten people who had contributed to the funeral of a relative or friend in the past two years had gone into debt to do so. So if that’s something you’d rather avoid, be honest about your wishes.
If you do want all the frills, you can save your loved ones a lot of cash by paying now.
People have traditionally taken out life insurance policies to cover funeral costs.
But I’m not a big fan of these. Why? Because they often end up costing more than the funeral would have done, particularly if you take one out early and keep paying year after year.
Funeral plans often cover the costs of a coffin and hearse but may not include the price of a headstone or burial plot
With these life insurance products you’re generally only covered after a year and if you stop paying the premiums, the insurance will end and you won’t get anything back.
Also, because the cash sum is fixed, inflation will reduce its buying power over time and you’ll pay more if you live longer.
For example, according to moneysavingexpert.com, an average 65-year-old woman paying £7 a month for the over 50s plan from SunLife will get a fixed payment of £1,193 after 14 years even though she’s paid in £2,100.
Put the same amount in a tax-free ISA and you’d reach the pay-out amount two years earlier.
British Seniors also has what is essentially a life insurance policy to cover the cost of your funeral.
Cover starts from £7.65 a month but for enough to cover even the most basic funeral, you’d need at least the Silver plan (£4,000 pay-out). The instalments for this are £14.30 per month.
More cost-effective is a funeral plan with an insurance company such as Legal & General where you can often lock in the price, thus getting a better deal.
These can be paid in a lump sump, or you can set up monthly instalments which, unlike insurance premiums, end once the funeral cost is paid.
These plans usually cover most items, such as a coffin and hearse. But be aware of what is not included, such as the price of a burial plot, which can be more than £3,000, or headstone, which can cost upwards of £1,000.
A burial plot could cost more than £3,000 while a headstone can cost upwards of £1,000
A funeral plan can be taken out by anyone aged over 18, though some providers stipulate you need to be at least 50.
Since last year, these are covered by the Financial Services Compensation Scheme which means you may be FSCS protected if the provider goes out of business on or after July 29 2022.
The Co-op offers a range of these plans to suit all budgets from Simple, £2,975, which covers a basic funeral, to Gold, which costs £4,210 and includes extras such as pallbearers and a hearse. There is currently £250 off all plans, though none includes costs for a burial plot.
You can pay in full, spread the cost over six or 12 months with no additional costs or choose monthly instalments (with extra cost) over two to 25 years. Co-op members get an additional discount, (£75 off the Simple, £125 off the other three packages).
Golden Charter, also has options to pay in instalments over ten or 15 years.
Dignity offers prepaid funeral plans guaranteeing to cover your burial costs in full (excluding the plot)and you create your own, which can be paid over a maximum five years at no extra cost. Prices start at £2,990.
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