How to avoid potentially huge increases in funeral costs

Jun 7, 2016
How to avoid potentially huge increases in funeral costs

Every week there seems to be an article or TV commentary on the rising funeral costs in the UK. 


The latest in the Daily Mail has a rather scary headline "Families hit by 50% hike in the price of funerals", this is a little misleading as it's not a general increase, but specific to certain areas depending on where you live. 

Of course the sentiment is correct, the cost of a funeral has risen by over 6% every year since 1980, according the Royal London National Funeral Index. Which means that the average cost of a funeral has risen from £1,984 in 2000 to more than £3,700 in 2015. 

If funeral inflation continues at this rate then this is what a funeral could cost when your time is up: 

5 years £4,827 

10 years £6,491 

20 years £11,733 

30 years £21,211 

This increase has led to more and more families having to borrow money from the wider family or pay for the funeral on their credit card or take a loan out to cover the funeral costs. 

Traditionally people only start to consider their own mortality when they around 65 years of age, with a big percentage probably nearer 75, which is understandable as none of us believe that we are actually going to die, do we? 

The reality is that if you don't start to consider how you will pay for your funeral earlier than this, then unless you have savings that can be used to pay for your funeral, your family will end up paying for it or worse still borrowing money to pay for it. 

If there is a property to be sold this can of course be used to pay for the funeral, but as this can take some months to come to fruition the funeral director will want paying before then.   

So what are your choices? 

Here at Over50choices we have seen an increase in a younger age group looking to purchase a prepaid funeral plan; the 50 plus age group seem to have a wider awareness than the older generation and are more aware of the options available depending on their budget.   

For those on a tight budget 

Most of the recent press articles have focussed on the lack of government support for those on low incomes who can't afford a funeral for their loved ones, so one option you may wish to consider is an over 50s life insurance plan, whilst not a prepaid funeral plan it will provide a cash sum that could be used to pay for your funeral when the time comes, these start from around £4 a month. 

You should always read the terms and conditions so you know exactly what you are getting and how inflation over the years could reduce the cash sums buying power.   

For those who have sufficient savings 

With the interest on your savings currently around 1% and funeral inflation averaging 6%, it's not difficult to see why purchasing a funeral plan is a good idea. Provided you do not need access to these funds of course. 

Funeral plans start from around £3,500 so they are most definitely a considered purchase. 

Your money will be held safely in an independently managed trust fund until the time comes.   

For those wishing to spread the costs with monthly payments 

Monthly payment funeral plans are increasing in popularity as they offer a more affordable entry point with potentially some significant financial savings against forecast future funeral costs.

Even with the additional interest or administration charges that you pay with monthly funeral plans when you pay for longer than 12 months, you can see from the above future price predications that you could be saving your loved ones some financial heartache. 

You can spread your costs from 1 year to 30 years, although the longer the period the less attractive the total amount repayable appears, but payment periods of up to 10 years are popular.  

In summary 

None of us are going to live forever. The sooner we start to consider how we will pay for our funeral and whether we want to leave the arrangements to our families, the potentially cheaper it will cost and the less emotional stress our families will be under when the time comes.    


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Ashley Shepherd is an Over 50s Personal Finance Expert

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