What is a Funeral Plan?

A Funeral Plan is a way of prepaying for a funeral. The plan lets you fix in the cost of the funeral at today’s prices.

When you want your plan to start, your family just has to make one phone call to a local Funeral Director. The Funeral Director will already be aware of your funeral plans, and they will have been paid in advance so your loved ones won’t have to pay for your funeral. By buying a Funeral Plan now, you will protect your family from higher costs later on – and make sure the Funeral Director carries out all of your wishes as you would want.

What does a cheap Funeral Plan include?

Funeral Plans vary from plan to plan. You can choose from a very cheap basic Funeral Plan, or go for a very extravagant plan depending on your preference and budget.

Basic plans often include the following costs:

All Funeral Director costs and support to plan funeral

A minister to conduct the funeral ceremony

A coffin

A hearse

Care of the body

Crematorium fees

Protect your family against rising costs

The price of a funeral in the UK is rising at an astonishing rate. When you prepay for a Funeral Plan, you guarantee that you lock in the cost of a funeral at today’s prices.

So, for example, if you bought a Funeral Plan today at £3500 and the plan wasn’t used for 20 years, you wouldn’t have to pay £14,000 for the future cost. Your original Funeral Plan, which cost £3500, would cover all of the elements that your plan specified.

Funeral Plans receive protection from inheritance tax

When you buy a prepaid Funeral Plan, it is entirely outside of the reach of inheritance tax.

If you used this money as savings, with the idea of the funds being set aside for a funeral, then your family may have a nasty surprise. The money you put aside will form part of your Estate, which may be subject to inheritance tax.

How to pay for your Funeral Plan

The payment options for a Funeral Plan can be tailored around your budget to make sure that it is always affordable.

Your choices include:

Paying for your Funeral Plan outright in one payment

Splitting your Funeral Plan costs into monthly payments for up to 12 months and paying no interest at all on your payments. Some providers may offer a more extended interest-free period

Pay a low deposit and then split your costs into monthly payments, sometimes up to as many as five years plus, depending on the provider and your age when you take out the policy

Some providers also offer over 50s life insurance policies as an alternative way to financially plan for a funeral. With these policies, depending on your age when you take out the policy and when you pass away, you may be paying premiums for 25 years plus. The plans typically pay out a lump sum on your death as long as you have paid two years of premiums. They may provide cover earlier than this if you die as a result of an accident.