11 Jul 2024

How to pay for your own funeral

Paying for your own funeral is not the sort of spending any of us look forward to, but it’s something we all have to consider later in life. Funeral costs are not getting any cheaper and prices can vary substantially depending on where you live in the UK, and whether you opt for a burial or cremation.

Average UK funeral costs rose from £3,395 in 2013 to £4,450 in 20231. If prices keep rising at the rate they did between 2013 and 2023, the average funeral could cost £6,259 by 20332. With these eye-rising costs in mind, how can you finance your own funeral? We'll take a look at how prepaid funeral plans work and what the alternatives are.

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Short of having perhaps money set aside in savings for funeral costs, most people paying for a funeral will need to find the money from somewhere. Here are some of your options:

  • Take out a prepaid funeral plan
  • Get over 50s life insurance towards funeral costs
  • Agree a plan with a funeral director
  • Use existing assets (your estate)
  • Draw upon cash reserves.

The short answer is yes – you can pay for a funeral in advance through a prepaid funeral plan. These are an option for those who wish to pay for a funeral in advance at today’s prices. If you're considering one, ensure you read the information thoroughly as not all UK prepaid funeral plans are the same.

As the name suggests, a prepaid funeral plan is an arrangement that lets you pay in advance for a funeral. The amount you pay will be based on the price quoted at the time you take out the plan.

A funeral plan prepaid will usually cover the essential costs of a funeral director, including the coffin, care of the body, cars and pall-bearers, plus either the cost of cremation or a burial, depending on your preference. It’s unlikely to cover other costs such as a wake, floral tributes or a headstone. Paying for a funeral in advance may tie you to a particular Funeral Director or funeral company, which may become difficult if you move in the intervening years. Also, what’s offered can vary a great deal, so make sure to check that everything you want is covered on any plan you take out.

Once you’ve paid the agreed amount in your funeral payment plan, the parts of the funeral included in the plan are covered when you die. The provider will pay the money straight to the Funeral Director, so your friends or family won't have to get too involved in the financial or administrative side. It's also worth knowing you won’t pay Inheritance Tax on your UK funeral plan.

Since 29 July 2022, the Financial Conduct Authority has regulated the Funeral Plans sector. This will provide customers with enhanced protection if they take out a prepaid funeral plan from an FCA authorised provider. Read more information on the FCA Regulation of Pre-Paid Funeral Plans.

Prepaid funeral plans pros and cons

Thinking of taking out a prepaid funeral plan? Below are some of the pros and cons.

Pros

Certainty over costs

The price of a funeral plan prepaid is set in stone at today’s costs. You can pay for it upfront with a lump sum or spread the cost. By paying upfront you normally avoid additional interest and fees.

Clarity over funeral arrangements

Choose a funeral plan that includes the services you want to pay for when you die. If you’re spreading the cost, these services are provided even if you die before paying the final instalment.

Peace of mind

When you buy a prepaid funeral plan, you choose the funeral director you want to use. At a difficult time, your family won’t have to worry about organising all of the funeral arrangements.

 

Cons

Potential to overpay

If you decide to spread the cost, watch out for interest or fees. Over the years, the amount you pay in funeral plan instalments, plus interest, could be more than the cost of your funeral.

You'll need to make the payments

Loved ones may need to pay for services that are not included in your funeral plan. If you are spreading the cost, you need to pay at least the first 12 instalments. If you don’t pay them when they are due, the provider could cancel the funeral plan.

Moving home

If you move too far, you may need to change your choice of funeral directors. The funeral plan provider will need to be working with funeral directors in the area you’re moving to. This may limit choice and there could be a fee to pay.

Some say it’s smart to prepay for a funeral, while others are happy to stump up the cash through their estate when the time comes. Either way, funerals can be expensive, so it pays to plan ahead and think about how your funeral will be paid for.

Paying for your own funeral may be a significant expense for you to think about covering, especially if you have a more elaborate service in mind or the costs include paying for a burial plot. It's worth trying to estimate what the likely costs will be, and then looking into ways you can begin putting plans in place to help pay them.

As a rough estimate, a one-off funeral plan payment could cost you up to £5,000, but you could potentially get a more basic plan for under £3,000. People understandably want to know how much a prepaid funeral expenses cost, but in reality, it depends on the size and scale of your funeral and if you’d like to pay a lump sum or monthly instalments – paying monthly could increase the overall cost.

How to get a prepaid funeral plan

If you decide that a funeral plan prepaid is right for you, here are some points to consider to help you decide how best to plan for your funeral. If you need help deciding, please seek professional advice.

1. Assess your finances. 

Could you cover the cost through your estate instead? How much would you need to pay for a prepaid funeral versus the alternatives?

2. Use a comparison site.

It’s worth doing your homework online to review the different pros and cons of each funeral plan.

3. Decide on the payment structure.

Do you want to pay in a lump sum or in instalments?

4. Review the Terms and Conditions.

It’s important to understand you know what the prepaid funeral plan entails, and what it covers (and doesn’t cover).

5. Inform your family.

You should make sure your nearest and dearest are aware of how to make a prepaid funeral plan claim. 

Alternatives to prepaid funeral plans

While prepaid funeral plans are one way to manage the costs of a funeral, you can alternatively draw upon existing assets, negotiate a deal with a funeral provider, or use Over 50s Life Insurance for additional support. You can read more about these options below.

Use your assets

If you’re lucky, you’ll have enough money in your estate to cover your funeral costs. If you'd like this money to be used in this way, you should ring-fence it, leaving clear instructions with family members or a solicitor. Remember that if funeral costs continue to rise faster than savings grow, it may be necessary to review and increase the amount set aside. If you feel you need more information, you should seek professional advice.

Not everyone likes the idea of saving up for an event they won’t get to witness, but if you do decide to pay for your own funeral using assets, here are some of the potential advantages:

  • You can access your funeral funds in advance of the event.
  • You can plan your funeral payments carefully based on your finances, rather than a rushed decision.
  • Your loved ones won’t have to think about funeral costs when they’re grieving.

Shop around

If you don’t fancy paying for your funeral before you die, you could always shop around by getting quotes from different funeral service providers, and seeing if you can prearrange a fee, rather than pre-paying. It could potentially be cheaper if you use a national provider, rather than local burial or cremation funeral charges, which vary greatly.

Over 50s Life Insurance

Over 50s life insurance plans are designed to pay a cash sum to your loved ones when you die, that can be used to contribute towards your funeral, unpaid bills or even to enjoy as a gift when you’re gone. 

Of course, there is nothing to stop you from having a prepaid funeral plan in place, while using Over 50s Fixed Life Insurance to help your loved ones pay for those special extras – from funeral flowers to refreshments at the wake. Your loved ones may wish to spend money from a variety of sources to give you a fitting send-off. And while our Over 50s Fixed Life Insurance can leave your loved ones with money they can put towards the funeral, the cash sum could alternatively be put to other use, such as buying a small gift.

No one expects paying for your own funeral to be fun, but whichever option you choose - from using your own estate to taking out a prepaid funeral plan - you can enjoy the peace of mind that comes from knowing that you’ll have helped your loved ones by making things easier for them at a difficult time.

1. Legal & General Research, 2023.

2. 2023 - 2033 forecast based on average annual compound growth rate of 3.47% each year between 2011 and 2023.

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