Funeral plans versus personal savings

Planning for your funeral is increasingly viewed as a very positive thing to do. Making provisions for the future can help save your family from financial stress at a very difficult time and protect them from the potentially crippling impact of unexpected funeral expenses.

Over half the people surveyed for the SunLife (2021), Cost of Dying Report said they had to help pay funeral costs from savings and investments1. Unfortunately, the economics of saving privately for your funeral make less and less sense, hit by the double whammy of rising funeral prices and falling interest rates.

SunLife’s annual ‘Cost of Dying Report’ highlights the sad fact that funeral prices keep on rising – by 128% since the insurer’s first report in 2004. Surveying more than 1,500 people who have organised a funeral over the last four years, the most recent Cost of Dying Report found that the average cost of a basic funeral had reached £4,184 in 2020, and that one in four people said the costs surprised them.

The report also shows, consistently, that many people don’t put enough aside to cover the cost of their funeral. This year’s survey showed that although 65% of people made some financial provision for their funeral, only two thirds of that group had put aside enough to cover the whole cost.

Sadly, 14% of families that had to find money to pay for the funeral they organised were faced with ‘notable’ financial problems. Some had to use credit cards or borrow from friends or relatives to cover the expense.

Record interest rate lows

With SunLife forecasting that the average cost of a basic funeral will rise past £5,000 within five years, the problem of funeral funding shortfalls could be made worse by historically low interest rates on ISAs and savings accounts.

Financial website of the year This Is Money describes ISA rates as ‘pitiful – even more so than regular accounts’2 and reported in February that record amounts were pulled from the tax-free saving accounts in the last six months.

Regular savers have equally suffered very low interest rates since the financial crash in 2008. However, at the end of 2020 the interest rates available across all UK savings accounts were at an all-time low3. On accounts providing easy access to savings, rates fell as low as 0.19%, and even locking your money away for five years was paying less than 1% in December 2020.

Making matters worse for savers, already low interest rates have been pushed lower by the COVID-19 pandemic. Successive lockdowns have meant spending has stalled and savings have soared – Briton’s squirreled away £54.6billion during the three months between April and June 20203. With incredibly robust cash reserves, banks’ don’t need to rely on attracting everyday savers and can afford to reduce regular savings rates.

The funeral-plan alternative

Financial experts are warning that 2021 and beyond are unlikely to be any better for savers; so what is the alternative for people wanting to make proper provision for the future?

Worries about funeral-cost inflation and the potential for savings shortfalls have fuelled a rise in the number of people turning to pre-paid funeral plans to fund their funeral costs. More than a third (35%) of the survey respondents in SunLife’s (2021) Cost of Dying Report had been able to turn to a pre-paid funeral plan to cover the costs of the funerals they arranged.

Unlike savings, Golden Charter funeral plans fix the costs of your funeral director’s services at today’s prices. This guarantees that there will be nothing more for your family to pay for these services, no matter how much the price of funeral-director services rise. Once your plan is paid for4, you’ll have the reassurance of knowing all of their costs are covered.

With a range of payment options available to suit all budgets, Golden Charter’s funeral plans cover funeral director’s services, with options for a coffin, hearse and transportation, and an allowance towards third-party costs such as crematorium and officiants’ fees.

A pre-paid funeral plan also allows you to detail your funeral wishes; Golden Charter plan holders can choose a trusted, independent funeral director from a network of almost 3,000 independent funeral directors around the UK5.

Putting money aside in a regular savings account beats making no provision for funeral expenses. But with continuing low interest rates and funeral-cost inflation, the only way to guarantee your funeral director’s costs will be covered is a pre-paid funeral plan.

So why not take the first step today?

Golden Charter is committed to giving customers value year after year, that’s why they’ve frozen their funeral plans at 2020 prices and have already helped over 800,000 people plan ahead.6

They have a team of friendly UK-based advisors who are waiting to help with everything from choosing a local funeral director to the finer details of your funeral arrangements.

Plus, you’ll get a free pen just for enquiring. If you take out a funeral plan with Golden Charter before the 7th April 2021, you’ll also receive a free £150 M&S gift card7 exclusive to Silversurfers members.

Request your free, no obligation information pack today by submitting your online enquiry here or call Golden Charter free on 0800 090 2254 and quote SILVER150 to claim your gift card.7


1 The SunLife (2021), Cost of Dying Report,
2 This is Money, Record amount pulled from the tax-free saving accounts in the last six months
3 This is Money, This year we saved more than ever before but rates hit record lows
4 Or after two years’ consecutive payments if paying by the fixed monthly payment option
5 Based on number of funeral director branches in the UK accepting Golden Charter plans at 1st September 2019 (2,934). Golden Charter Annual Review 2018/19.
6 As of 08/12/20 801,460 customers have chosen to plan ahead with Golden Charter
7 To receive the gift card, you must purchase a funeral plan over the phone or online with Golden Charter before, or on March 31, 2021, quoting SILVER100. If you are purchasing a plan online you must use the link provided. The Gift Card will be issued between 30 days and 4 months from the start date of your plan, providing that your plan remains in place and the necessary payments have been received. No cash alternative will be offered. Not to be used in conjunction with any other offer.
The contents of this article are for reference purposes only and do not constitute financial or legal advice. Independent financial or legal advice should be sought in relation to any specific matter. Articles are published by us without any knowledge or notice of the circumstances in which you or anyone else may use or rely on articles or any copy of the information, guidance or documents obtained from articles. We operate and publish articles without undertaking or accepting any duty of care or responsibility for articles or their contents, services or facilities. You undertake to rely on them entirely at your own risk, and without recourse to us. No assurance of the quality of articles is given or undertaken (whether as to the accuracy, completeness, fitness for any purpose, conformance to any description or sample, or otherwise), or as to the timeliness of the publication.

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