Pre-paid too much money? 17 October 2022 at 1:15PM in Deaths, funerals & probate 7 replies 554 views

JD299

Hi
A family member pre-paid their funeral package and paid £4,500 we have found that most places are offering £3,500 for the costs and will pocket the £1000 for themselves - anyone had any experience with this? We would like the £1000 back to spend on food/ drinks for the afters or even rather donate to a good cause rather than see it be pocketed by these companies...

macman

If you agreed to a fixed price then you really have no comeback. Prices of all goods and services rise and fall, that doesn't mean you get your money back if they fall.
If the family member were to live another thirty years and the actual costs were by then £5,500, would you be offering to pay them another £1k to make up the shortfall?
Unfortunately these policies are sold by preying on people's fear of a 'pauper's funeral', which of course is a myth anyway. They are always terrible value.

JD299

macman said:

If you agreed to a fixed price then you really have no comeback. Prices of all goods and services rise and fall, that doesn't mean you get your money back if they fall.
If the family member were to live another thirty years and the actual costs were by then £5,500, would you be offering to pay them another £1k to make up the shortfall?
Unfortunately these policies are sold by preying on people's fear of a 'pauper's funeral', which of course is a myth anyway. They are always terrible value.

Thanks for your reply! I guess this is where they make their money, lesson learnt for the future.. 

Malthusian

There is no £1,000 to hand back; it has gone to cover the costs of other customers whose premiums don't cover the cost of their funeral thanks to prices going up. (Assuming, of course, that the funeral plan provider doesn't do a Safe Hands.) That's insurance. It might not be what you want but it is what your family member wanted.
As Macman says, there's a reason these plans are sold on daytime TV rather than by regulated financial advisers.

thegreenone

My Mum's funeral cost around £5000 in 2020.  Basic coffin, services of FD*, Crematorium and Celebrant*.  No wake as still in Covid restrictions.  I know the cost of funerals varies around the country (we are SE) but I think what your family member paid is about right.

*both exceptional - couldn't have asked for more help and kindness.

As above, no-one knows what the prices of things will be when your relative dies, and their Estate may be asked to pay more.

Do both policies provide absolutely the same?

Pennylane

My late Mum’s funeral cost nearly £4,500 and that was a graveside funeral with just 9 family members and a Priest due to Covid restrictions. No church service,  no music, no singing but the sun shone and it was quiet and respectful. No wake due to restrictions so we had a chat in the car park and went our separate ways.  😢

Marcon

JD299 said:

macman said:

If you agreed to a fixed price then you really have no comeback. Prices of all goods and services rise and fall, that doesn't mean you get your money back if they fall.
If the family member were to live another thirty years and the actual costs were by then £5,500, would you be offering to pay them another £1k to make up the shortfall?
Unfortunately these policies are sold by preying on people's fear of a 'pauper's funeral', which of course is a myth anyway. They are always terrible value.

Thanks for your reply! I guess this is where they make their money, lesson learnt for the future.. 

In addition to macman's helpful comment, remember too that if a company offering any type of service doesn't make a profit, it will soon be out of business and won't be able to supply whatever service was paid for ahead of time.

poppystar

My father prepaid his funeral and the price had come down - due to the really nice funeral directors being taken over by a larger company who had set price funerals whereas my father had paid for items individually. Whilst it didn’t cover the difference entirely they were happy to include the orders of service and the cost of flowers which were not part of the original price as a gesture of goodwill. There is always a risk in pre payment and in insurance type schemes but I think some people want to know what they will be getting and that it is all arranged for their peace of mind.