Nobody wants to think about dying, but we do need to plan for our final goodbye.
As there is one thing that I do know, and that is that we will all die. So this is something we can all plan for as it’s life’s only guarantee – other than taxation of course! However, how many of us dare discuss what we would like for our funeral, let alone how to pay for it.
Dying sadly is not cheap. As an extravagant funeral can cost a fortune and an average one cost you a few thousand pounds, as much as £3-5,000 perhaps or even more.
Well that’s what Sun Life's Annual Cost of Dying Report 2012 states:
From reading Sun Life research it states that the basic cost of a funeral has increased by 61% over the past 8 years – significantly more than inflation.
A basic funeral price once you remove the optional costs such as flowers and a wake totals approximately just under £3,300. This price is made up of 4 areas: funeral director's fees, death certificate, the cost of the funeral service and burial or the cremation fees.
The death certificate cost remains unchanged but all the other areas have increased. Even the Church of England has increased its funeral fees. Apparently even the funeral directors have increased their prices as the death rate continues to decrease, but their costs are increasing – just like ours!
However, cremation fees have increased significantly.
The main reason for this rise is that councils need to spend large amounts of money bringing crematoriums into line with new laws concerning their emissions. As also, they are rising as local council are turning to cremation income following government budget cuts.
If you need to save some money, or don’t have it and you try opting for a burial instead, that also won't save you money as fees for this also rose according to Sun Life. With a shortage of burial space as the main reason given for this, but there are suspicions that councils are increasing their prices to cover cutbacks and shortfalls elsewhere.
Funeral benefit plans
A funeral benefit plan is usually offered as an add-on to an over-50s life insurance plan. Problem being is that you may possibly end up paying in more money than you get paid back because the payout that you receive is FIXED but you could be paying into the plan for as many as 30 years or more. So you do the working out. And the pay-out is not inflation-linked or guaranteed to cover every cost of the funeral, so even after years of saving your relatives could still have to pay a large bill. Also, typically the funeral plan will tie you into 1 funeral director.
Therefore, given this you could simply put your money into a savings account and let your family know where the money is, and that it is intended to cover your funeral costs. Also ensure you mention these savings in your will. This idea gives you the flexibility of keeping control of your money and gives your relatives the alternative option to choose which funeral director they want to use.
Another good idea and indeed the one my parents chose is to buy a funeral plan. With this type of plan you pay for your funeral before you die. This may seem a little depressing, but a reality, you will get the funeral that you want and all your loved ones, family and friends will not be left with the large bill to pay. As my Dad said “It’s good financial sense and planning, as I will only pay today's funeral prices with no hidden unexpected fees”. He is 80 now and bought the plan as soon as he retired at 65. I do know that the plan he used allowed him to pay a fixed sum and spread the remaining costs over a short period.
So needless to say we will all die and doing so comes at a cost, so recognising the need to plan for this is easier now than it could be when it finally happens. So if you can, try organising for it now and take some of the pressure off your family when it finally happens. After all, it will be an opportunity for all to celebrate your life.