What is a funeral plan?
A funeral plan is something you buy whilst you are alive to pay for your funeral in advance. They are sometimes known as pre-paid funeral plans as they allow you to pay upfront for most of the costs associated with a funeral.
It makes good financial sense to pay upfront as funeral costs are rising rapidly. Safe Hands Funeral Plans recently analysed the data and came to the staggering conclusion that people could be paying £26,000 for their final send off in 30 years’ time.
The cost of funerals is set to increase by more than 570% in the next 30 years. That means that the outlay on a funeral which today costs around £4,600 will set you back over £25,000. Even in ten years’ time, the costs will have almost doubled.
The forecasts are based on figures published by the Competition and Markets Authority (CMA) which shows a compound growth in prices of 6%, compared with the current inflation rate of under 1%. The CMA is currently investigating pricing in the industry as costs continue to rise.
One way round avoiding the hike in prices is through a pre-paid funeral plan where you pay up front at a fixed price. Safe Hands reports growing sales of their plans as people look for ways to pay for their own funerals without having to burden their loved ones when they die,
For many people facing a change of financial circumstances during lockdown, reviewing finances is now a necessity. Safe Hands reports that many new clients have diverted funds away from low return savings and investments, into their pre-paid funeral plans. This is particularly so for the under forties, who stand to save the most by because of their longer life expectancy.
But its not just about saving money. Buying a funeral plan means that your loved ones won’t be burdened with the costs at a very stressful time. They give you that peace of mind knowing that you’ve done everything you can to ease the pain.
Funeral plans come in various forms, each with a different set of benefits. The cheapest are known as direct cremation and cover the cost of the funeral directors’ fees, a simple coffin and of course the cremation. The more expensive plans give you a better-quality coffin, a hearse and pallbearers, a service at the crematorium and an allowance towards costs such as cremation fees, doctors fee and any costs for a minister. Take a look at Safe Hands plans to compare prices.
It is important to remember that funeral plans will not cover everything. The top plans have an allowance of £1200 which you can spend on a range of “extras”.
To make it easier on your finances, Safe Hands plans can be either bought outright, by monthly instalment or over a longer period up the ten years.
Safe Hands is often asked “who looks after the money”. Your money goes into trust. This trust is managed by Sterling Trust Corporation Limited, an independent trustee who works with investment fund managers TJM Partnership and Interactive Advisers, who offer bespoke trading and investment management services to high net worth clients, companies and intermediaries and whose service is facilitated by a strategic partnership with Jarvis Investment Management and Britannia Global Markets Limited to make sure your money is well looked after and kept safe.
No-one really likes talking about death but spending time now on planning for inevitable will be a huge weight off your mind.