🔔 ❓ Ask Anna: What is your take on investing in a pre-paid Funeral Plan?

Ask Anna: What is your take on investing in a pre-paid Funeral Plan - I know costs are rising, so if you have some spare cash is it worth taking one out?

It’s no secret that the cost of funerals have been rising year on year, with the average cost in 2017 at £4,086, up from £2,971 in 2011 and projected to rise to almost £6,000 from 2024~. That’s an increase of 45% in just seven years~. For this reason, many people are looking to plan ahead now, putting some money aside to shield their loved ones from a financial burden at the worst time.

There are things to consider when choosing a funeral plan of course. Not all plans offer the same benefits and certainly not all providers are the same. As a minimum, make sure you choose a provider that is registered with a professional body like the Funeral Planning Authority (FPA).

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Here's a checklist of things you might like to consider to help you choose the right funeral plan for you:

1. Check that the plan provider is registered with a professional body like the Funeral Planning Authority (FPA), who monitor the conduct of their registered providers. You can check the list of registered FPA providers at: funeralplanningauthority.co.uk
2. If you’re using a comparison website, make sure you’re clear about which funeral plan providers the website works with. Ask them to list their providers and confirm whether advice is totally independent.
3. Check all guarantees; find out what’s covered - and what’s not. When little is guaranteed, there is a real chance your loved ones might have to pay for a significant shortfall.
4. Ask them specifically whether third party costs such as the cremation fee and the minister's fee are guaranteed, or if there is a contribution paid towards this, how much it is and whether it rises with inflation.
5. Ask the provider where your money will be invested and find out the financial health of any trust fund. Are they prepared to send you the trust fund’s details? Make sure if anything happens to your funeral plan provider, your money will still be protected.
6. Some plans are reliant upon specific funeral directors. Find out what happens if they are no longer in business at the time of the funeral. Although you may favour a particular funeral director, it may be better to choose a national provider with an approved network, just in case.
7. Be careful if a provider has only recently set up their business – it might be wise to go with an established organisation, with a proven track record.
8. Above all, avoid making a snap decision like buying a plan over the phone, without feeling comfortable that you have all the information to hand. Good providers will be happy to send you more information and for you consider the pros and cons in your own time.

Funeral plans are a great way of not putting off the inevitable and making things easier for the ones you love, at what is already an extremely difficult time. With careful planning this option could be a very good way for you to take control of your funeral arrangements, both saving you money and giving you and your family essential peace of mind.

Notes

~ 2011-2017: Matter Communications Independent Research. 2024 forecast is based on the average annual compounded growth rate of 5.45% each year between 2011 and 2017.