Thinking about your own funeral can be uncomfortable. However, funeral prices are high and increasing all the time, so planning how to pay for it now could save your family from the added stress of financial problems at an already difficult time.
Our guide takes a look at the average cost of a funeral, how you can go about paying for it, and some ideas on how to keep the costs down.
What is the average cost of a funeral?
The average cost of a funeral is estimated by Money Advice Service to be around £4,000. Specifically, the average cost of funerals with a burial is £4,267, and those with cremations come in at £3,247.
A large portion of the cost depends on your arrangements, for example whether you want a more basic ceremony or one with added extras such as a headstone and a wake with catering. However, one of the largest factors that influences the cost of your funeral will be location. One study showed that costs within London can vary by over £2,000 on average.
If you are concerned about costs, it’s important to remember that it can still be an appropriate and meaningful occasion without breaking the bank. It’s very unlikely your loved one would have wanted to add financial worries at what is an already extremely difficult time.
What do you typically have to pay for?
Beyond the cremation or burial, there are plenty of other costs. For either of these options you’ll need to consider transportation and a plot for the burial. Then you need to work out whether you want a ceremony which will include hiring a venue and extras such as catering.
This can all seem overwhelming, so many choose to hire a funeral director. This will take the pressure off you making these decisions, and will give your family time to grieve following your death. However, it’s worth bearing in mind that funeral directors can be significantly more expensive than planning the funeral yourself. Their fees alone can be 50% of the cost of the funeral.
Funeral directors will deal with the body from collection to burial or cremation, and will secure any permissions needed on your behalf. They will also provide a coffin and hearse, and can organise a ceremony for an extra cost.
There may also be third party costs, for example a clergyman or non-religious officiant to run the ceremony, and a doctor’s certification of death. These may be included in the package if you choose to use a funeral director.
How to Pay for Your Funeral
- Whole of life insurance/over 50’s plans: These insurance plans guarantee to pay a tax-free lump sum when you die. This money goes to your family and can alleviate the significant financial burden of paying for your funeral. You should bear in mind that these policies can be a lot more expensive than term life insurance policies, so make sure you check whether they are right for you before buying. Find out more about Whole of Life Insurance.
- Term life insurance: Unlike whole of life policies, these only run for a specific period, and will pay-out only if you die during this time. Your family could use this pay-out to pay for your funeral costs. The two main kinds of term life insurance are level cover and decreasing cover. With level cover, the pay-out will be the same no matter when you die. With decreasing cover, the pay-out decreases in line with debts you pay off while alive, for example your mortgage.
- Funeral Insurance: This is just what it sounds like, an insurance plan specifically to pay for your funeral, usually available from funeral directors. These are often offered with many different cost plans, covering different parts of the funeral. Make sure you know exactly what you are getting, and that you wouldn’t save money on your funeral by buying slightly more expensive cover.
Keeping Costs Down
There are a number of choices you can make that will keep the costs down. For example, the average cost of a cremation is over £1000 less than the average cost for a burial. There’s also a large variation in the cost of items such as coffins and headstones.
So make sure that you shop around. When it comes to choosing what to do for your funeral, there are a vast number of options at different prices covering different things. When comparing options, aim to balance your ideal plan with the cost of putting it in place, particularly when choosing to use a funeral director. This is especially true if it could leave your family in a difficult financial position.
It’s worth noting that the Government offers state support if you receive benefits or are a low-income household. These are known as “funeral payments”. You should bear in mind that these usually do not cover the cost of the whole funeral. They also operate like a loan, so any money that your family get from your estate will usually go back to the Government to pay this off.
On rare occasion, local councils may organise a public funeral for those with no family or friends, or if you leave no money in your estate.