Following the death of a loved one, many people worry about their financial duties and whether or not they will be able to afford to provide a funeral that would meet the standards that their loved one would have wanted. This guide will look at the financial side of funerals and considers the costs incurred to you when paying for burials and cremations. It will also help you to understand which schemes could help you pay for your own funeral in advance, as well as what other help is out there for those without pre-paid plans.
Paying for your own funeral
Paying for a funeral in advance can help relieve some of the stress on your loved ones in what can be a very emotional time. A pre-paid plan gives you some peace of mind in that you know that your family will not have to incur the cost of your funeral wishes after you have gone.
Whereas in the past it was normal for the costs of a funeral to be recovered from a person’s estate, now it is becoming ever more common place to look at alternative ways to pay. The funds from an estate can take a long time to be released which sometimes leaves friends and family, at least temporarily, having to foot the bill.
What does a funeral plan cover?
A funeral plan can cover a number of areas of a funeral and can vary greatly depending on your needs and wishes, or those of your loved one. Funeral plans will often range from the very basic to the very detailed and their price will usually follow suit. When choosing a plan it’s important to consider in what way you would like to celebrate your life and also how much money you are prepared, or able to spend.
A simple plan might cover the cost of a basic coffin, transportation of the deceased (within a certain distance) care of the deceased, the supply of a hearse, general arrangements and hire of staff for the service, with a cash sum towards disbursement costs (such as crematorium, church or cemetery fees.)
You might find that a more complex plan may provide for more detailed services. For example, your funeral director may offer guidance on registering the death and planning the service. They may offer more detailed finishing’s and materials for the coffin, provide more luxurious forms of transport to the ceremony and make other additional touches like ‘thank you’ cards for the mourners.
Paying for a funeral plan
When taking out a pre-paid funeral plan, it is important to consider how you will pay for it. You may wish to pay for everything up front or arrange a payment plan. If you make one single payment then you will benefit from the peace of mind that everything is already taken care of and you have no more costs to account for. Alternatively a payment plan may be more affordable for you as you can pay in instalments.
There is also a certain amount of flexibility with most payment plans and should you decide to move area, your provider should be able to switch your plan over to another funeral director who is based closer to where you live.
You may wish to purchase a pre-paid funeral plan on behalf of someone else but do not wish for them to know. A good funeral director will allow you to pay on behalf of someone else and in the strictest confidentiality; so that when they die their funeral arrangements will already be taken care of.
Whether you are interested in having the finest funeral available with only the very best features, or a more simple service with only the essentials, a good funeral provider will be able to offer you a range of different plans with varying price options.
Benefits of a pre-paid funeral plan
Here are a few of the many benefits of a pre-paid funeral plan that are worth considering:
- You can choose what kind of funeral you would like so that your family don’t have to guess after you have gone
- Your loved ones won’t feel pressured into making difficult decisions about your funeral proceedings
- A will might not be read until after a funeral has already taken place
- You can avoid cost increases and beat inflation by purchasing now instead of later when costs have risen
- Your family will be supported by experienced and knowledgeable staff
Life Insurance policies
An alternative to pre-paid funeral plans are life insurance policies taken out with insurance companies. But although these deals may seem attractive at first there are in fact, many drawbacks.
Firstly, many customers who take out policies may find that they pay in far more money than they will ever get back as the payout is fixed from day one.
What’s more, the payout is not inflation-linked which means that your loved ones could end up footing the bill if your policy doesn’t cover your funeral costs – even after years of saving. A pre-paid funeral plan is therefore a far better option as you can be confident that everything will be covered.
Paying for the funeral of a loved one
Some employers provide pension schemes for their employees where a proportion of their wage is saved up, and some schemes will make a pay out to help with funeral costs when an employee passes away, so it is worth enquiring as to whether or not your loved one had a pension scheme in place. Surviving partners may also be eligible for payment of their pension income.
If your loved one did not have a pension scheme with an employer then they may have made their own arrangements, for example if they were self-employed. If you believe this may be the case then you should check paperwork and contact the Pensions Tracing Service if necessary.
Members of the Cremation Society may benefit from reduced cremation fees or contributions towards fees.
The Social Fund
Individuals and couples who are deemed to be on low income may receive some help towards funeral costs from what is called the Social Fund. If you are eligible then you may be provided with help; however the costs must kept low – so a simple, respectful funeral service is recommended.
Things like the cost of a burial plot, burial fees or cremation fees can be covered and the individual can also be awarded up to £700 for help with paying funeral director’s fees, coffins and any flower arrangements.
To be eligible for the Social Fund you or your partner must be in receipt of one of the following:
- Income support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Pension credit
- Working Tax Credit which includes a disability or severe disability element
- Child Tax Credit at a higher rate than the family element
- Council Tax Benefit
- Housing Benefit
Although this may make you eligible it is also worth noting that the circumstances of other relatives of the person who has died will be taken into account and any money that is awarded will have to be paid back from their estate.
Help for war pensioners
If the person who has passed away is a war pensioner then you may be able to get help with the cost of a simple funeral if they meet the following criteria:
- Died from a condition they were receiving a pension for
- Died in hospital while having treatment for that condition
- If they were in receipt of a war pensioner’s Constant Attendance Allowance at the time of their death
- If they were receiving a War Disablement Pension assessed at 80% or more and Unemployability Supplement at the time of their death.
None of the money which is awarded to help with payment for a war pensioner’s funeral will be recouped from their estate. However, a claim must be made for help with funeral costs within three months of the funeral date.
Other than a mortgage, a funeral plan is the highest priority debt after a person has died. In some circumstances when there is no funeral plan in place, the funeral costs can be met by any money that has been left behind in that persons estate. A person’s ‘estate’ can include money, property and belongings at the time of death.
In some cases where no relatives have come forward, after someone has passed away in hospital, the hospital may make a claim from the person’s estate to pay for the costs of a funeral. If that person has died outside of hospital then the local council has a duty to make arrangements for the person and may also claim from their estate.
For many, planning a funeral isn’t very high on their agenda and will often take a backseat to things like holidays and home improvements. However with an average of 100,000 people a year in the UK struggling to pay for a funeral, it is worth considering who will be left to pay for yours.
It’s not that saving for a funeral isn’t on someone’s agenda; it’s simply that they don’t think they will have enough money left over at the end of the month to be able to save for one. However, with various different plans available from detailed to quite basic, there is likely to be an option that will be cost effective for you and will mean that your loved ones won’t be left with the bill.
If you’re interested in taking out a funeral plan you can request a free colour brochure by calling us on 0151 228 3900 to talk to one of our team who will be happy to discuss our range of Funeral Plan options available and answer any other questions you might have.