Understanding the Financial Side of Funerals and What Is Involved


According to a recent report from a major insurance group, the average expenditure for a funeral in the UK today stands at almost £4,200. That’s an increase of 128 per cent compared to the average cost in 2004. Therefore, paying for a funeral takes some considerable financial planning for most people even if they stand to inherit from the deceased’s estate after the burial or cremation has taken place. What are the main options from a financial perspective?


If you do not have sufficient funds to pay for a funeral, then you will be able to borrow. Many high street lenders provide loans for funerals but the interest they will charge is likely to vary depending on your credit rating. As such, borrowing can be an expensive option. Some funeral directors have payment schemes that will allow you to split up the cost of funeral arrangements. However, these, too, will be subject to interest charges so they tend to push the overall cost up.

Funeral Insurance

Some people take out funeral insurance plans. These will often pay out an agreed sum in the event of your death so they work a little like life insurance schemes. You pay into the funeral insurance scheme with an annual or monthly transaction in most cases. When you pass on, the insurance will cover your funeral expenses but only to the value of the policy. 

For example, if your insurance policy covers funeral expenses to the value of £3,000 but the cost associated with your service rises to £4,000 in the time between you taking out the policy and it paying out, then your loved ones will need to find the difference which, in this example, would be £1,000. As you can see, funeral insurance doesn’t cover every expense, especially when you take into account inflation and the often rapidly rising costs of funerals today.

Pay Monthly Funeral Plans

If you want to settle your funeral costs yourself in advance of your death, then you can do so. Pay monthly burial plans allow you to settle the cost of your interment in convenient monthly instalments. Of course, with pay monthly funeral plans, you do not have to be buried. You can also find service providers that offer pay monthly cremation plans, too. According to one long-standing operator, Newrest Funerals, paying in advance gives people peace of mind. This is because good schemes lock in the costs of the funeral as they are today, not what they will be by the time you pass on. In this regard, they are different from funeral insurance policies.

Essentially, people who pay into pay monthly funeral plans will be covered after they’ve paid a sufficient number of instalments. This means that they won’t pass funeral costs on to their loved ones after they’ve gone. In addition, they can guarantee they’ll receive the sort of send-off they would have liked without their loved ones feeling that they need to skimp on the arrangements or make big financial sacrifices either.


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