I am often asked questions like this one from Cliff: “Do you have any advice on selecting a funeral plan?” My reply generally is “don’t”. If you don’t have a funeral plan, then the cost (in 2019 about £4,000) is simply paid from the money or property you leave. If you have a house or flat, or savings in the bank, that will cover the cost. If you don’t have those things, it may be hard for you to pay the cost now – even by spreading it over ten years when interest will be added.
Most relatives would rather you spent the money on yourself while you were alive. It is often better value just to put, say, £40 a month into a savings account labelled “my funeral” and tell your heirs about it. They can then choose the funeral they want – after all, funerals are for the living, not the dead.
People consider these plans so that when they die, their funeral is already paid for and their heirs don’t have to worry. Plan providers today’s prices rather than the inevitably higher costs when you die. But remember that these plans restrict your funeral to particular firms and to specific times of the day. Many are operated by
the major funeral chains, which charge more than some local family-run businesses.
Plans usually exclude many items your heirs may want such as cars, flowers, burial, a headstone, embalming and some fees. Even with a plan, your heirs will have to pay for those.
Funeral plans are unregulated but there is a Funeral Planning Authority that sets standards. If you do want a plan, use a firm that belongs to it. My advice is let your
heirs pay for the funeral out of your estate, or put what you can afford into a savings account labelled “funeral”. It may not be enough, but nor will most funeral plans.
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Warning: Over-50s life insurance plans are NOT pre-paid funeral plans and are bad value. Avoid them.
Paul Lewis presents Money Box on Radio 4 - QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com I cannot answer you personally, but I will reflect them in my Radio Times column.