Eesha | Edited by Sam D
A funeral can cost over £5,000 all-in. And if you want a more lavish send-off the cost can soar. So if you're worried about what kind of funeral you'll have once you pass away, one option to consider is a funeral plan. This quick guide covers what a funeral plan is, how much it costs and what to look out for.
What is a funeral plan? Very simply a funeral plan covers the cost of your send-off when you die. You can buy one from a funeral plan provider which then pays the funeral director directly for your ceremony. This means your family won't have to get involved with any of the finances or administration.
What will the plan cover? Typically funeral plans will cover the essentials of a funeral, such as the cost of a coffin, care of the body, transport of the body to a funeral director and a hearse. It usually won't include any extras such as such as flowers, catering for a wake, a newspaper notice or extra cars to transport family members. So if you want these you'll need to let your family know they may need to pay for these at the time.
It's important when choosing a plan you look at exactly what will be covered, as they can vary. For example one plan may cover the cost of a headstone, while another may not. So you'll need to think about what you want covered and how much you can afford to pay, as the more lavish your funeral, the more expensive the plan.
How much does a plan cost? It depends on what you want included in your funeral. The more you want the more expensive it'll be. Some providers will also let you choose either a cremation funeral plan or a burial plan – though the costs are roughly the same. Most funeral plan providers have three to four tiers of funeral plan packages to choose from.
The basic package can cost from anything between £3,000 and £3,500 and will cover you for a very basic funeral including a simple coffin, a standard funeral procession route, the burial or cremation fee, a set funeral day and set times the family can visit the chapel. Your family may also receive bereavement support.
By contrast, the most expensive funeral plan can cost up to £4,500, and will be much more flexible. You'll get a coffin made with more luxurious materials, two or more limousines for your family, flexible visits to the chapel and a choice of funeral day.
You can either choose to pay for the plan up front or spread the payment over 12 monthly instalments. It won't cost anything extra to do this. Yet some providers may let you pay in instalments over much more than 12 months – 2 or 5 years typically. Here, there is an added cost to watch out for so if you can afford to pay in under 12 months this is the cheapest option.
Also be aware that should you die before you finish paying off the installments, whoever is looking after your estate will need to pay the remaining balance that's due. Or, the plan will be cancelled and all the money will be returned, minus a cancellation fee which can be anything from £100 up to £400 depending on the provider.
So does my family get a lump sum when I die, or will the funeral just be paid for? The funeral plan provider will notify and pay the funeral director directly. So your family won't receive any money.
But crucially this isn't like an over-50s' life insurance plan – where you could pay in more than you get out. With funeral plans you pay a set amount and the funeral is guaranteed to be paid for if you go through a registered provider. The only time your funeral might not be covered is if you die before finishing your payments or you miss any payments – but as explained above any money you've paid will be returned to you.
One thing to consider though is that by buying a plan now you'll be using the money that you might need now to pay for your future funeral, instead of letting it coming out of your estate when you die. But if you can afford to pay for it now, then you can set out your own funeral terms (though it's also best you tell this to your family too) and it helps to protect your family should prices rise in the future – though do bear in mind they'll still have to pay for any extras that aren't covered.
What if I die in another 20 years and the funeral costs more than what I paid for the plan? This is likely to happen as according to SunLife the cost of a basic funeral has increased every year for the past 12 years, and it will only keep on going up. If costs do rise and you've bought a plan through a registered funeral plan provider then your funeral will still be covered and there won't be anything extra to pay.
This is because a contract will be in place between the the funeral director and the plan provider that says the director cannot refuse to carry out the funeral if costs do increase. They may however ask for more money, but your funeral plan provider will cover this. This isn't for you or your family to worry about.
However this doesn't apply to the extra services that aren't included in your plan, for example flowers and catering.
Where can I buy a plan from? Because it's the funeral that'll be paid for you usually need to be at least 50 to buy a plan, though some providers like the Co-op allow you to get one from age 18. It's best you get one from a firm registered with the professional body, the Funeral Planning Authority (FPA). Most of the big ones, including the Co-op, Age UK, Golden Charter and Dignity are signed up.If registered it means these providers meet certain standards. For example the provider must give you clear information on what is covered by the funeral plan and what isn't, and they must invest the money paid by you into a separate trust or insurance policy. This makes no difference to you, but it means if the provider were to go bust the money is ring-fenced and protected, so your funeral will still be paid for.
Where can I find the deals for the cheapest plan providers? We are in the midst of turning this in to a full guide, which will include a comparison of plans from providers – sign up to the MSE weekly email to be the first to know when we do. But as we wanted to get this quick guide out, in the meantime you can follow the links above to a couple of the main providers and do a manual comparison yourself.
What if I don't buy a funeral plan and my family doesn't have enough money to pay for my funeral? Depending on the situation, if the the person organising your funeral is on a low income they may qualify to get a funeral payment from the Government.
How much they get will vary depending on their circumstances, but the payments will usually cover the burial/cremation fee, cost of documents prepared, transport to the funeral, and up to £700 for other funeral director costs, such as the coffin and hearse. The funeral payment will need to be repaid, and it's usually taken from your estate before any debts or bills are repaid.
Alternatively, if there's no money in your estate or there's nobody to arrange one for you, your local council can arrange a Public Health Funeral. This will be a very basic funeral on a set day, though how the service will run varies from council to council.