A combination of the low interest rate economic conditions the country finds itself in and of course the recent changes in how tax on savings accounts is applied: that is, if you are a basic tax payer you can now earn up to £1,000 in savings interest before you pay tax and £500 if you are a higher rate tax payer.
The ISA savings account was always seen as the place to put your money to avoid paying tax but as millions of people have now been taken out of paying tax on savings there is no longer a need to chase the best ISA rate, which may have lead to some increased inertia in people to move their savings around.
Placing your money in a longer term savings account will of course reap you slightly better rates of interest, but these are unlikely to make a significant difference to the interest received.
So some people have started to look for alternative places to invest their money and an increasing number of older savers are now looking at prepaid funeral plans as a way to not only protect their families from the emotional stress of arranging their funeral when the time comes, but also the potential financial benefits or purchasing their funeral in advance.
With funeral inflation averaging 6.1% since 1980, according to Royal London Funeral Cost Index, if this continues in just 10 years time the average cost of a funeral could increase from £3,710 to nearly £6,500.
There are now over 1 million prepaid funeral plans in existence, due to their increase in popular over recent years as greater awareness of rising funeral costs has hit the headlines.
There are a number of providers to choose from, we suggest that you always seek out a Funeral Planning Authority regulated plan provider, the most recognised names will be Coop, Dignity and Golden Charter.
Or your could approach a company like ourselves who will give you free independent advice on all FPA prepaid funeral plans on the market, plus offer a discount or incentive on some of them.
So whilst the current ISA savings rates may be poor and the long term outlook doesn't look much better, you could start to consider alternatives for your money and save your family some heartache by removing the burden of arranging your funeral.