A funeral plan is a secure investment

Have your savings grown 103% in the last 12 years? The cost of a funeral has, and with the average cost rising to £3,897, the concept of paying for your funeral in advance, setting out the type of service you want and removing the financial burden from your loved ones is becoming increasingly appealing to more and more people.

Funeral plan vs cash ISA

You may have been considering using savings in cash ISAs to cover the cost of your funeral. However, although this tax-free saving might be great for a rainy day, there are other options when it comes to covering your funeral costs. With continuing low interest rates and the cost of funerals outstripping pensions, wages and inflation, there is no guarantee that any form of regular savings could keep the pace with this level of growth.

In 2011, the average cost of a funeral was £3,091 and if this money had been placed into a cash ISA, in the four years to 2015, the savings would only have grown by 7% to a total value of £3,406[1]. However, by 2015, the average cost of a funeral had increased by 19% to £3,693, considerably more than the average savings rate. While you can’t rely on savings to match the rising price of funerals, with a funeral plan you can fix the cost of your funeral directors services at today’s prices.   

How safe is my money in a funeral plan?

Many of us will never have paid for a service that we hopefully won’t need for 10, 20 or even 30 years. However, the reality is, death happens to us all and it’s something we all have in common. As a nation, we are reluctant and often uncomfortable talking about death with our loved ones with recent figures suggesting that more than 80% of us have never spoken to our families about our end-of-life wishes. However, by planning ahead with a funeral plan, we can provide peace of mind to our family whilst helping to protect against rising costs.

When it comes to funeral plans, there are rules in place ensuring payments are protected and the required funds are available when they are needed to pay for your funeral.

Funeral Planning Authority (FPA): As a member of the Funeral Planning Authority (FPA), all of our customers are protected through the FPA’s strict Code of Practice. All of our finances and procedures have been independently reviewed by the FPA and all payments our customers make towards their chosen funeral plan are paid into a Trust or a leading life assurance policy.

Golden Charter Trust: When paying via low cost instalments, 12 monthly payments or indeed paying in full, your payments are held securely by the Golden Charter Trust, a financially separate entity. Currently estimated at more than £760 million[2], the Golden Charter Trust holds all plan holder payments until such time as they are required to pay for the cost of the funeral – at which time, the money paid in will be given to the chosen funeral director.

If you have chosen to pay for your funeral plan via fixed monthly payments, your money will not be paid into the Golden Charter Trust. Instead, it is paid into a life assurance policy and will remain there until such time as it is required to pay for your funeral arrangements.

Payment options: Alongside a variety of funeral plans, we have multiple ways in which you can pay for them. If you choose to pay for your plan with a single one-off payment, one key benefit of this is you are immediately covered. If you wish to spread this cost over a period of 12 months, you can do so without incurring additional costs.

However, with low cost instalments, as this is extended over a period of up to 30 years, you are not fully covered until the final payment is made (although money paid into the plan can be put towards the cost of the funeral should you die before the final payment is made).

If you are looking to fix the cost of your funeral director’s services at today’s prices, make the practical, financial decision and take out a funeral plan. For more information on our funeral plans, request a free info pack here.



[1] Building Societies Association, average Cash ISA savings rates Jan 2011-Oct 2015.

[2] Audited accounts, 2015-2016, goldenchartertrust.co.uk