How Paying For Your Funeral NOW Can Help You Save £1000s
- The cost of living is rising - but so is the cost of dying
- Costs associated with death have risen by over £2000 since 2008
- Pre-paid funeral plans are now regulated by the FCA
- Purchasing a plan could save you £1000s over time
The rising cost of living has been all over the news lately, but many people won’t have considered a different expense - the cost of dying.
Whether we like it or not, everyone will die at some point, and chances are your loved ones will need to organise and pay for your send-off. However, if you make plans now, you could lock in funeral costs which are likely to keep on rising over the years.
Tom Church, Co-Founder of money-saving community LatestDeals.co.uk, said: ‘We may not want to think about it, but the reality is that when we pass away, our families could be left with a funeral bill they can’t afford. With a pre-paid funeral plan, you can make their lives a little easier once you’re not around anymore.
‘Now pre-paid funeral plans are regulated by the FCA, which means that consumers are better protected and there are higher standards in place. Here are the money-saving benefits of these plans as you consider whether or not to take one out.’
Lock In A Price Now And Save £1000s By Avoiding Rising Costs
According to Statista, the average cost of dying has increased by over £2000 since 2008. Even the cost of a basic funeral has skyrocketed - SunLife calculated that in 2004, the average funeral cost £1920, but by 2017 it had snowballed to £4078. In other words, it isn’t just energy bills, petrol prices and groceries which are going up - the cost of leaving the planet is also pricier than ever. The good news is that, by purchasing a pre-paid funeral plan, you lock in the cost of a funeral at its current price - so even if it rises in the future, you won’t have to pay more.
Avoid Having Savings Count Towards Care Costs
You may want to save money for your end-of-life costs in your own savings account, but taking this measure instead of a funeral plan could count against you in the future. That’s because, once you’re older, you may need additional care. If the council assesses your savings, assets and income to decide how much goes towards any residential care, they may see your funeral nest egg and count it towards your care costs. Then, once you’ve passed away, your loved ones may struggle to come up with the funds for your funeral.
Allow Loved Ones To Access Funds Before The Legal Process Is Over
Once you’ve passed away, there will be legal processes to follow - and these could come before accessing any savings you may have that could go towards paying for a funeral. In other words, going through processes such as the grant of probate- where you sort out a deceased person’s estate - could take weeks, months or even years if there are issues such as multiple investments or property which needs to be sold. With a pre-paid plan, the funeral can be easily arranged ahead of the lengthier legal processes.
Dodge Potential Increases In Inheritance Tax
If you’re more tempted by putting money to one side, consider that such funds would be considered part of your estate, and therefore a higher level of inheritance tax could be applied when it’s time to go through your will. However, with a pre-paid funeral plan, a paid-off plan is not counted towards your estate and so inheritance tax is not affected.
Tom continued: ‘There are definitely benefits to pre-paying for your funeral. However, it may not be for everyone. Here are some examples of situations where you may not want to take out a plan.
You’d Struggle To Make Repayments
If you don’t have enough money left over in your monthly budget to allow for a funeral plan, it’s not worth forcing the situation and putting yourself in debt in an effort to keep your family protected once you’re gone. Ultimately, it’s wiser to keep your money under control now, and potentially think about the option again in the future should your situation change.
You Plan To Move Abroad In The Future
Pre-paid funeral plans are often set up on the assumption that you’ll remain in the area - or at least in the same country. If you’re planning to move within the UK in the future, you’ll want to make sure your plan allows you to switch your local funeral provider. If you’re planning to move abroad later in life, you should consider whether your plan will cater for overseas funerals. If not, it may be worth finding a specialist plan for ex-pats.
You’re Paying More Than The Funeral Is Worth
It’s best to pay off a funeral plan as quickly as possible - ideally within 12 months. Otherwise, you’ll begin paying interest, and if your plan lasts for 30 years, you could be paying more than what the actual funeral is worth.
You Buy A Plan You’re Not Happy With
Perhaps you want to avoid having your family dealing with funeral arrangements, but a pre-paid plan won’t be worth it if you’re cutting costs by going for the absolute basics. Ultimately, your send-off should abide by your final requests, so make sure you’re paying for a plan you really like instead of buying the cheapest option because you feel you have to.
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"cost of living"
"cost of dying"
Well, I guess houses and apartments are going to be "emptied" this winter.