How to pay for a funeral

Paying for a funeral in advance is a great way of removing the financial worry from your family. You pay today’s prices and because that price is fixed, also avoid future inflation saving your family thousands of pounds in funeral costs.

The good news is that plan providers offer a range of ways to pay for a funeral that are suitable for most budgets; so whether you prefer to get the cost out of the way with a single payment or spread it over a number of years, there’s a plan for you.

Funeral Payment Plans

When you pre-pay for a funeral with a funeral plan, your money is held securely either in an independent trust fund or a life insurance plan until it is required to pay for your funeral services.

The price you pay will vary depending on the company you choose, the level of service you prefer and also your payment method. As you pay more for monthly instalment funeral plans, the sooner you pay for your prepaid plan the cheaper it will be.

Single Payment Plans

This is the cheapest way of paying for a funeral plan as there are no additional fees. You pay the full price of the plan in one go with a single payment and are covered for your services as soon as your payment has been processed. The price you pay will depend on the level of service you choose but you can expect costs from around £3,200 for a standard plan, £3,600 for a midrange plan and £3,800 for a superior plan.

When paying for a funeral plan, regardless of the payment method you choose you have a review period, frequently referred to as a ‘cooling off period’ to ensure you are completely happy with the terms and conditions. If you do change your mind during this review period which varies between 14 to 31 days depending on the company, you can cancel the plan and all of your money will be fully refunded.

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Paying for your plan over 12 months

The majority of plan providers these days will allow you to spread your payment over 12 months without incurring additional fees – so the price of the plan will be the same as if you were to pay in one go.

With this payment method you are covered for your services once you have completed your 12 month instalment. If anything were to happen to you during this time the money you have paid into the plan would go towards the cost of your funeral service and the family would just need to pay the balance, based on the original fixed price.

paying for a funeral

Pay monthly funeral plans

If you prefer to pay for your funeral plan over a longer period, then instalment options are available. You will incur additional fees for spreading your payments but as this initial cost is based on today’s prices, even with the additional payment it could save your family a substantial amount of money.

The additional price you pay for your instalments depends on the company you choose, so it is worth shopping around. In addition some providers also charge a deposit which can be quite high so it is important to understand how much (if anything) you need to pay up front and the total cost of your plan once payments are complete.

Many providers offer instalments up to 10 years however there are now some companies that have options up to 25 years. Often you will find that plans have a stipulation that all monthly payments must be completed by a certain age – usually 80 or 85, so this may limit the options available to you.

You are covered for your services once you have completed all of the payments. If anything were to happen to you before your payments are complete, typically the money you have paid into the plan will go towards your funeral costs and the family will be asked just to pay the balance, based on the original price you agreed.

Fixed monthly instalment plans

A fixed monthly payment funeral plan is an instalment option but with a difference. You pay a fixed monthly premium that is based on your age and the level of service you choose. You are covered for your chosen funeral services after either the first or second year depending on the provider but will be expected to pay your premiums either for life or until you are 90.

 This means that you could end up paying more in monthly premiums than the actual cost of your funeral services; it all depends on how long you live and therefore how long you are paying into the plan.

How to pay for a funeral
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Are there any other ways I can pay for a funeral?

In addition to a funeral plan, there are a number of other options available to you if you are thinking putting plans in place that will help pay for a funeral:

An Over 50 life insurance plan pays out a cash sum when you die that your family could use to help with funeral costs. They would still need to make all of the arrangements but would have the cash sum to help with the cost.

Using Savings or an ISA is an alternative solution to paying for a funeral but you must be aware that funeral costs have been rising way above inflation for years now, so you may have to keep ‘topping up’ your savings account. At the end of the day a funeral plan will freeze your costs at today’s prices avoiding future inflation; something a savings account can’t do.

Also unless you are strong willed, you have the potential to dip into a savings account and use it as a ‘rainy day’ fund which again wouldn’t be the case with a prepaid funeral plan.

Paying from your estate is another solution for paying for a funeral however do keep in mind that it can take time to free up the cash from your property etc, which means your family may need to foot the bill in the meantime.





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