Will Your Funeral Force Your Family into Poverty?
Should you choose not to plan your funeral and pay for it in advance, you risk plunging your family into poverty after you have died. Your bank account or ISA investment is probably producing a return less than inflation, or 0% for many bank accounts. Transferring your money and paying for your funeral now, locks in the price today, for whenever your plan is used in the future.
Surveys suggest that the average price of a funeral is around £4,000. When you add a few drinks and sandwiches and room hire after the burial or cremation, individuals are facing total funeral bills of around £8,000.
When you have less than £100 in your bank account and know that your salary or pension will only clear your mortgage, food and utility bills each month, where are you likely to find several thousand pounds at short notice, without calling in your preferred loan shark?
Funeral inflation moves annually between 7% and 10%, depending upon where you live or die, across the UK. As the cost of burial ground increases rapidly, purchasing a plot in advance may be a sensible decision. Cremations are also increasing annually as rules are tightened about the environmental outcome connected to the emissions from these establishments.
Discussing Death and Debt Is Awkward, But for Who?
When elderly relatives claim that they won’t be around for much longer, it is easier to avoid the conversation about their demise and their funeral wishes, than ask them how much money they have set aside for the grand event. We should be able to discuss these matters, however uncomfortable.
Conversations deliberating death and choosing your favourite funeral music are often left to those who must make educated guesses after the guest of honour has passed away.
A funeral director will expect their bill to be paid shortly after the funeral. For the funeral to have been given the go-ahead, a signed contract will have been agreed and completed, stating who is to pay for the funeral.
Where the funds are not available, there are several options available:
Is there enough money in the deceased’s bank accounts, investments or savings?
Can family members contribute towards the total required?
Have you a large enough limit on your credit card?
What can be sold to raise the funds?
Whatever final choices are made, the bill must be settled by the responsible individual.
Will the Government Fund the Funeral?
Should you meet the necessary criteria, which involves receiving either one of the listed benefits or tax credits, the Funeral Payment will only cover the costs of a very basic funeral.
Where you are not on benefits, but have very little in the way of savings, you will not qualify for the government’s Funeral Payment. For those who do qualify, you may not receive everything on their list of ‘what you’ll get’ but any contribution will help relieve potential poverty or debt at a time of great grief. You can check whether you meet the eligibility criteria on the government’s website.
Organising your funeral in advance will help ease those decisions difficult to make. Would they have preferred a burial or cremation? Should you choose a traditional set of music for the funeral service? Were they particularly religious?
Paying for your funeral in advance means that you will not plunge your family into debt with them having to find a large sum of money at the wrong time.
Insurance policies are unlike funeral plans and are not designed to pay unknown funeral costs in the future.
Can You Choose an Economical Funeral?
There are always exceptions to any rule and an assortment of pub experts will inform you how you can be buried or cremated for less than £1,000. This may involve garden rubbish bags and little else. Green environmentalists may suggest a woodland burial and some of these options or choices might appeal to you.
The problem with having to spend between £4,000 and £8,000 on the funeral is having to save face and show the world that the deceased was loved and respected. This often demands a traditional funeral with its ever-increasing cost structures. Nevertheless, should the lack of a funeral plan put you and your family into debt and potential poverty, just to show other distant related individuals that you had the money for a good send off?
A free e-book, titled “How to Understand the Best Way to Choose a Prepaid Funeral Plan,” is available at: http://www.funeralplanadvice.com/wp-content/uploads/2013/10/eBook-How-to-choose-the-best-pre-paid-plan-1.pdf