Pay for your funeral now at todays prices? Funeral Bonds?

fluffybunny_2

Sorry to sound morbid but has anyone heard of Funeral Bonds?

I found out about them today. Basically, you buy your funeral now but the cost is covered for when you eventually die. I was talking to a funeral director today (as you do lol) and she said that funerals are going up all the time. They're approx £3000 now but they're expecting the cost to go up to between £6000-£8000 within 5 years!
She said that costs go up on the 1st of April each year. A local cremation yesterday was £425. Today, its gone up to £595!!
Two doctors are needed to certify a cremation. Yesterday £157, today £180 !! etc etc
She said that the law is changing with regard to the sales of plots for burials too. A cemetery down the road is now charging £1600 just for the plot! thats without any other fees!
A friend of hers bought her bond 18 years ago at a cost of £900. If the same "spec" funeral was bought now, it would be £4100 ! EEK!!!

Just wondered if anyone else heard of them?

lisyloo

The idea is a good one both financially but also the fact that is makes you think about what you would like which is a huge help to family members. You could do that anyway on a piece of paper but most people don't.

The obvious caveat that comes to mind is to make sure you are covered against any particular company ceasing to trade before you require their service. Any decent scheme should have that covered somehow.

ColdIron

I doubt that you'll be charged at today's prices as unless you die tomorrow they're on a hiding to nothing. There will be actuaries involved calculating the cost based on your age and the average life expectancy, much like annuities. There will be winners and losers

A sound idea in principle though and at least the burden won't fall on family members if your estate does not cover the cost

Mojisola

I was really pleased that my parents took out funeral plans. It made everything much easier when they died - we knew what they wanted and it was all paid for.

They paid about two/thirds of what a funeral would have cost if we'd had to pay out so it was money well spent.

kidmugsy

My wife is going to bury me under the compost heap, near to our late cats.

Biggles

They've been around for years. They're not a bad idea for people that have a bit of money now but don't know how to look after it.

Mojisola

Biggles wrote: »

They've been around for years. They're not a bad idea for people that have a bit of money now but don't know how to look after it.

They're also useful if you need to claim means tested benefits.

£5000 put away towards a couple's funerals would count as capital. Benefits would be affected once you have £6k in savings - that only leaves a couple £1k to keep by for emergencies.

Two funeral plans wouldn't count as capital.

grey_gym_sock

Mojisola wrote: »

They're also useful if you need to claim means tested benefits.

however, the even more money-saving approach would be to put all your assets into trust, so that when you die, you technically have nothing left, and the state will have to pay for your funeral. which would only be fair, when otherwise the money would only have been wasted on benefits spongers. (warning: may contain satire.)

Mojisola

grey_gym_sock wrote: »

however, the even more money-saving approach would be to put all your assets into trust, so that when you die, you technically have nothing left, and the state will have to pay for your funeral. which would only be fair, when otherwise the money would only have been wasted on benefits spongers. (warning: may contain satire.)

The way it worked with my parents was that they paid monthly for their funeral plans over two years and felt secure that they wouldn't be leaving us with a big financial problem when they died.

They were then able to put money aside each month so that when they needed a stairlift, they were able to pay for it themselves instead of taking grant money; when Mum needed a wheelchair, they bought one instead of using NHS service money; they also changed furniture which kept them more mobile and independent at home so saving the LA money and, when they needed carers, were able to pay for them, again saving the LA money.

If they had needed to keep £5k ring fenced to cover their funeral expenses, they wouldn't have been able to spend on the other things and would have used up taxpayers money.

fluffybunny_2

Mojisola wrote: »

The way it worked with my parents was that they paid monthly for their funeral plans over two years and felt secure that they wouldn't be leaving us with a big financial problem when they died.

They were then able to put money aside each month so that when they needed a stairlift, they were able to pay for it themselves instead of taking grant money; when Mum needed a wheelchair, they bought one instead of using NHS service money; they also changed furniture which kept them more mobile and independent at home so saving the LA money and, when they needed carers, were able to pay for them, again saving the LA money.

If they had needed to keep £5k ring fenced to cover their funeral expenses, they wouldn't have been able to spend on the other things and would have used up taxpayers money.

I dont understand how paying for their funerals over two years meant that they could then buy other things? surely by "ring fencing" £5k, they would still have been able to buy other things?
Don't get me wrong, I really do think funeral bonds are excellent but I dont understand the logic?

Mojisola

fluffybunny wrote: »

I dont understand how paying for their funerals over two years meant that they could then buy other things? surely by "ring fencing" £5k, they would still have been able to buy other things?
Don't get me wrong, I really do think funeral bonds are excellent but I dont understand the logic?

Because once they had more than £6k in savings their benefits would have been affected. They would have been trying to save up for big items from a reduced income.