What is a prepaid funeral plan?
A prepaid funeral plan is a way you can arrange and pay for your funeral in advance. It allows you to choose the funeral service you want and pay the way you prefer. However, one of the main benefits of a prepaid funeral plan is that you pay today’s prices.
Planning your funeral in advance this way is a wise decision for two extremely important reasons:
Smart with your money
The average cost of a funeral in the UK is currently £4,078, having risen by an incredible 116% since 2004; but this could increase to almost £7,000 in just 10 years time if costs continue to rise at a similar rate.
With a prepaid plan, your funeral services are fixed at today’s prices. This means you avoid future inflation and will never need to worry about rising costs again.
Kind to your family
In addition to saving money, a simple funeral plan can be a huge relief for families as it means they won’t have the worry of arranging and paying for a funeral.
Instead, everything is done for them; all they need to do is make one call and the funeral director will take care of everything as detailed in the plan.
Who are Simply Funeral Plans?: We have over 20 years experience in funeral planning and want to help you choose the right plan. We have teamed up with leading Funeral Planning Authority companies to ensure that you receive good value for money.
How do funeral plans work?
Funeral plans let you arrange and pay for your funeral in advance. You simply choose the type of funeral you want, pay at today’s prices with either a one off payment or monthly instalments and the funeral director will take care of everything when the time comes.
All plans guarantee to cover the funeral director’s costs, so once you’ve bought your plan, you will never have to pay a penny more for those services. This includes their help and guidance, a coffin, the hearse, limousines (depending on the plan you choose), use of the chapel of rest and their services on the day.
However, the majority of UK prepaid funeral plans only include a contribution towards the third party fees.
Third party funeral costs, also known as disbursements are essential fees beyond the control of the funeral director. This includes the cremation or burial costs, minister's fees and doctor’s fees if a second death certificate if required.
This contribution usually increases in value annually in line with either RPI or CPI but at the same time, the third party costs will also become more expensive too. So if there isn’t enough money in the ‘contribution pot’ to pay for these fees when the time comes, the family will have to pay the difference; which is why it is so important to check which are the best funeral plans before you buy.
So the big question here is why would you buy a prepaid funeral plan that only guarantees some of the services when you can choose one that for a similar price, guarantees absolutely everything included in the plan?
The cost of a funeral plan ranges from £2,900 to £4,300 depending on the funeral services included. The most expensive funeral plan will usually include a superior coffin and two limousines; whereas a funeral plan with one car will cost £3,700, or £3,300 for a standard plan with no car.
Some companies also offer a simple funeral plan with costs starting from as little as £2,900 however they usually come with some restrictions such as the time of the funeral service.
The plan we recommend starts from £2,895 or £20.42 a month
How can I pay for a funeral plan?
You can pay for a funeral plan in full or monthly and your money is held in a trust fund or life insurance policy. The cheapest way to pay is either by single payment, or over 12 months as most funeral plan providers won’t charge extra for this payment option. If you prefer to spread the cost of your funeral plan, then a monthly funeral plan may be a more suitable option.
Are funeral plans safe?
When you pay for a funeral plan your money is held securely in either a trust fund or life insurance plan, which is regulated by the Financial Conduct Authority. Therefore, although Funeral Plans themselves aren’t regulated by the FCA, the way your money is handled is safe and tightly managed.
If your chosen funeral plan provider were to go out of business, your money is protected and ringfenced, ready to pay for your chosen funeral services when the time comes.
In addition, many leading UK plan providers are registered with and regulated by the Funeral Planning Authority, the regulatory body for Funeral Plans. To become an FPA registered company you need to prove that you comply with their strict rules on how the money is held and the service you receive.
Are funeral plans a good idea?
A funeral plan could be a good idea if you want to arrange and pay for your funeral in advance; have the funds available and understand exactly how your chosen funeral plan works. To be safe it’s important to choose a guaranteed plan from a Funeral Planning Authority registered company.
Having compared the market for the best funeral plans, we are happy to recommend Dignity as the one that for us, stands out from the crowd. This is simply because it offers more guarantees than most plan providers. With Dignity you get a full guarantee for your funeral directors costs PLUS a full guarantee for the cremation fees and minister’s fees too.
And with awards and recognition for good service coming out of their ears, you can trust that you are in safe hands too.
If however you prefer a cremation only plan with no funeral service, then take a look at our recommendations for direct cremation funeral plans.
Prepaid funeral plans pros and cons
Understanding Prepaid funeral plans pros and cons is key to making an informed decision on buying a funeral plan. With approximately 1.4 million plans already purchased in the UK and demand increasing every year, being aware of the pros and cons of prepaid funeral plans is more important than ever.
Pre-paid funeral plan pros
- Save money by avoiding funeral inflation
- Remove the worry of making funeral arrangements from your family
- Choose the type of funeral you want at a price you are happy paying
- Flexibility if you move within the UK (with national funeral planning companies)
- Affordable with flexible payment options to choose from
- Reduces your liability for inheritance tax
Pre-paid funeral plan cons
- There may be additional funeral costs to pay for when the time comes
- Not all providers are Funeral Planning Authority registered
- Your money will be tied up
- You won’t be able to use the plan if you move abroad (unless it’s a European funeral plan)
Life insurance vs funeral plan
Life insurance is an alternative solution to helping with funeral costs. A funeral plan lets you arrange and pay for your funeral in advance whereas life insurance or more specifically whole of life insurance pays out a cash sum when you die that your family can put towards funeral costs.
Does life insurance cover funeral costs?
Whether life insurance covers funeral costs will depend on the amount of life cover you have and the cost of a funeral when the time comes.
With most life insurance plans, both the monthly premiums and cash sum paid out are fixed, meaning they won’t increase with inflation. Therefore before deciding on how much life insurance you need, do take into account funeral inflation if you want to ensure there are sufficient funds available to pay for a funeral.
Why choose a Simply Plan?
The team at Simply Funeral Plans are a bit geeky when it comes to funeral plans. With over 10 years experience, we are experts when it comes to routing out the truth and finding the best funeral plans for our customers.
We believe you should have complete confidence in your prepaid plan, knowing that when the time comes, it will provide the services as promised in the plan, with no nasty surprises and no hidden costs.
Quite simply, we believe in a funeral plan that you can trust. Why not request a brochure today.
Request a brochure
Most popular asked questions & answers
- How do joint funeral plans work?
A Joint Funeral Plan is one plan that is written in both names and can be used for either the first or the second death - which ever you choose. Some plan providers do not offer joint prepaid funeral plans, however with Dignity, for a £75 fee you can have a joint plan. If you then choose to buy a second plan at a later date, your £75 will be fully refunded.
Please note that one plan will only provide one funeral, as detailed in the plan. The only way to freeze your funeral directors costs at today's prices is to take a plan each; in the event one funeral plan is taken and then used upon the first death, the second funeral is likely to cost a lot more, based on funeral inflation over the last 20 years. Therefore if there are sufficient funds to purchase 2 plans, this would save the family money and of course the worry of having to arrange everything when the time comes
- Are all plans regulated by the Funeral Planning Authority?
The plan provider we recommend is regulated by the Funeral Planning Authority (FPA).
The FPA are the only organisation recognised by the government's Money Advice Service who recommend that you should seek a plan provider that is regulated by the FPA, as they offer added protection for your money and services.
Members include; Golden Charter, Coop funeralcare, Dignity, Perfect Choice, Avalon, Funeral Planning Services, Golden Leaves, Funeral Partners. Please note that Safehands are NOT regulated by the FPA.
- Which funeral plans do you offer?
We have chosen to offer Dignity funeral plans as we believe that they offer good value and security for your money. In addition to being competitively priced, they also guarantee your cremation & ministers fees at today's prices or offer one of the highest allowances of £1,220 for burial funerals
Alternative funeral plan providers include, Coop funeralcare, Golden Charter, Age UK, Avalon, Perfect Choice and Funeral Planning Services, all of whom offer prepaid funeral plans.
- Can I take out a prepaid funeral plan for someone else?
Yes, you can take out a prepaid funeral plan for anyone. Whether it's for your parents, partner or other relative it doesn't matter and you can even have all the correspondence come to you.
Often when an elderly relative needs to move into a nursing home, taking a prepaid plan can reduce the assets used by the local council as it's an allowable deprivation of assets, as well as give you peace of mind that everything has been pre-arranged. Please note that you don't need a power of attorney to take out the plan or to be related to the plan holder.
- Can I choose a local funeral director?
Dignity has over 1,180 privately owned or approved independent funeral directors that accept their plans and use all crematoriums throughout the UK. If you move, the plan moves with you at no extra cost, so you can be sure your services will be provided by a local company when the time comes
- What happens should I die when I am abroad?
If you are planning a holiday, check your travel insurance cover to see whether it covers your repatriation costs back to the UK. Once you are back home, your prepaid funeral plan will then take care of the rest.
- What is funeral insurance?
Funeral insurance is a name given to different types of funeral plans, here at Simply Funeral Plans we offer all types of plans.
Funeral insurance is often a term associated with Over 50 Life Insurance which can be used to help with funeral costs, but is a life insurance plan and not a funeral plan. However, some prepaid monthly plans are referred to as Funeral Insurance, as your payments are paid to a life insurance fund rather than a trust fund.
- Can I still apply if I am in poor health?
- Do you offer under 50 years of age funeral plans?
- Do you offer green funeral plans?
- Do you offer simple funeral plans?
Yes, we do offer simple funeral plans. We offer a range of Dignity Funeral Plans, from a basic plan which covers the essentials needed for a funeral service, to a superior plan. All the plans available are simple and easy to understand and suit most budgets and services required. If you would like some help deciding which plan might be right for you please contact us.