National funeral director chains, including Dignity, Co-operative and Golden Charter, offer the ability to buy a funeral in advance, these packages are known as Prepaid Funeral Plans. Unfortunately these packages have many exclusions and conditions and normally only cover a proportion of the elements that make up the total cost of a funeral. It can also mean they charge a substantial premium for the elements they do provide.
The conventional and most cost effective approach is for a loved one to pay a funeral director directly. This can mean savings of up to 25% compared to the cost of a Prepaid Funeral Plan. Prepaid Funeral Plans include sales commissions and administration fees as well as having many exclusions and conditions.
The savings and benefit of receiving an inflation-linked cash sum can mean for the same cost as a Prepaid Funeral Plan your loved ones are able to pay all associated costs relating to your funeral, not just the elements a Prepaid Funeral Plan would include.
Prepaid Funeral Plans usually exclude the cost of memorial headstones, flowers, catering, venue hire, minister fees, choir fees, organist fees, any notices, order of service sheets, doctor’s fees, embalming, some don’t even include burial plots or crematorium fees. Their conditions can restrict the time and date of your funeral, the funeral director is appointed by the plan provider, so neither you nor your family has any say.

Here is a list of items typically not included in a Prepaid Funeral Plan along with their average costs.

Memorial headstones £916
Flowers £149
catering £444
Venue hire £397
Minister fees (depending on plan) £155
Choir £100
Organist £50
Death notice £85
Order of Service sheets £63
Limousines (depending on plan) £319
Doctor’s fees £164
Only a contribution is paid
towards burial or crematorium
fees, some plans pay nothing
Unknown
Special requests Unknown
Repatriation if abroad If required
Embalming If required
Coroner’s fees If required
Total £2,842

Total excludes unknown and if required items.

Source: Some of the data from Money Advice Service

Paying for a funeral at the point of need means you won’t pay Prepaid Funeral Plan sales commission, so your money goes further

According to research by The Mail on Sunday, “almost half the money from a prepaid funeral plan can be pocketed in administration fees and commission… someone who puts aside £3,900… might end up with just £2,300 to fund it after £1,600 is gobbled up in charges… the provider might then hand over up to £800 of its cash share as payment to a salesman.”
https://www.thisismoney.co.uk/money/bills/article-4677366/Many-opt-funeral-plans.html
Official published figures show Dignity paid Age UK £9.4 million in commission in 2015 alone.
https://www.independent.co.uk/news/uk/home-news/age-uk-condemned-for-promoting-expensive-funerals-to-the-elderly-a6863476.html

Competition and Markets Authority

Plan providers emphasise the need to pay for a funeral now because of further potential rising prices. It is true funeral costs have increased considerably in recent years. However, since June 2018 the amount charged for a funeral is under more scrutiny by the Competition and Markets Authority (CMA). Therefore prices should stop rising at the rate they have been and with more competition may even start to come down.
See our Inflation-linked Cash plans

It is this straightforward

  • Select the plan amount
  • Pay by a single payment or by a number of equal monthly instalments
  • The plan earns inflation-linked interest
  • On death the inflation-linked cash sum is paid out before probate, direct to the recipient you have nominated

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  • Pay money in and on death the plan pays out a cash sum direct to the recipient you have named.
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  • The plan locks in today’s prices as it is inflation-linked.
  • The recipient does not have any rights to the cash sum until your death.
  • You can change the recipient at anytime.
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Cost and Payout Comparison

Over 50 Life Insurance v Bequest Direct Inflation-linked Cash Plan

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