Did you know that the average cost of a basic funeral now stands at £3,897? Rising costs of burial, cremation and funeral director’s services - plus other expenses - have made it more than twice as expensive as it was 12 years’ ago.
And at such a difficult time for family and friends, it is one more thing to think about. But there is help out there to deal with funeral costs.
Help with funeral costs
You could receive approximately £700 from Social Fund
Funeral payments from the Social Fund are a government schemeto help contribute to the cost of funerals, such as burial/cremation fees, travel costs and certificates, if you are on a low income or receive certain benefits. In most cases, it is a loan that you would usually pay back to the government from the estate of the deceased. The most you can get towards further funeral expenses (eg: funeral director fees, flowers, coffin) is usually £700, and you have to apply within 3 months of the funeral itself. How much you get in total depends on your own individual situation.
Widows and widowers may receive a £2500 lump sum
The Bereavement Support Payment, for widows, widowers and those who have lost a civil partner, was introduced on 6 April 2017 and replaces all other bereavement allowances. It comprises a one-off lump sum in month one (usually £2500), which could help with funeral costs, followed by a smaller monthly payment for the next 18 months.
British Gas is known to lend a helping hand in financial troubles
The British Gas Energy Trust can provide help if the costs of the funeral, even with help from the government, are causing financial troubles.
Child Funeral Charity also provides support
The Child Funeral Charity can give help if families have lost a child under the age of 16.
Help with funeral costs for cancer patients
Leukemia Care can help top up payments from the Social Fund for leukaemia sufferers diagnosed within the last four years, with a series of grants rather than a lump sum.
React is a children’s charity that primarily helps with specialist equipment to give comfort and independence to the lives of young people with terminal illnesses, although grants can be provided for funerals too.
Who has to pay for a funeral?
Sometimes the deceased person has already paid for their funeral with funds set aside specifically for that purpose.
Prepaid funeral plans - Arranging it in advance by paying a lump sum or instalments into a plan with a funeral director or provider, which then gets invested in a trust fund or put into an insurance policy.
Funeral insurance - An investment that pays out a lump sum intended to cover the cost of the funeral, and sometimes known as ‘an over-50s plan.’
Funeral costs essentially come out of the estate of the deceased, and is not subject to inheritance tax. Many people worry that they won’t leave enough in their estate for their funeral, which is why so many people look to plan a funeral in advance.
Benefits of a funeral plan
Planning ahead with a pre-paid funeral plan can provide peace of mind to make a difficult situation that bit easier when the time comes.
Minimize stress - It can help shield your family from financial stress on top of the emotional impact, as well as the strain of having to plan it all themselves.
Beat inflation - You could protect yourself against future inflation by buying a plan with funeral directors that’s fixed at current prices.
Security - The money you put away is safeguarded until it is needed. While funeral plans are not regulated by the FCA (Financial Conduct Authority), the FPA (Funeral Planning Association) has a code of conduct that members must sign up to.
Extra protection - Paying a lump sum or part of it by credit card can give you card protection under Section 75 of the Consumer Credit Act to help safeguard your policy.
Financial flexibility - Paying by instalments can help spread the cost and help you budget within your means, so that you can be assured that you have enough funds.
Always try to make sure you know what you are buying - is a burial plot included? What does it include besides a religious service and a ceremony?
With funeral prices likely to continue to increase, fixing your funeral costs at today’s prices with a prepaid funeral plan is an idea well worth considering to help give you peace of mind that you’ll be financially covered.
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