Funeral services can cost you a lot of money. According to the latest statistics, a typical funeral director service today costs around £4,078. Some parts of the UK charge higher than the national rates. For example, in London, you’re likely to pay twice the national average price.
If you want to save money on your funeral costs, you can avail of the direct cremation service. It will only set you back£1,600. Alternatively, you can organise the funeral to reduce your expenses. You can expect the rates to go up continuously in the next few years. Thankfully, there is a way you can get around this issue.
Today, you have two options if you want to save money on your future funeral needs. One is to purchase pre-paid funeral plans. Your second is to open a cash ISA account.
What is a funeral plan?
A typical UK prepaid funeral plan can cost anywhere between £3,000 and £5,000. You have the option to pay in instalments, depending on the funeral plan provider. Some companies allow their policyholders to stretch out the payment over a 12-month period.
The funeral plan typically covers the casket, funeral ceremony and other fees. Many individuals prefer availing of a funeral plan because it provides them peace of mind. If you want to spare your loved ones from the stress of handling funeral preparations, a funeral plan will work great for you.
What are cash ISAs?
Cash ISAs primarily work as an ordinary savings account. Any UK resident aged 16 years and above can open a cash ISA account. Today, a cash ISA is one of the best ways to save money. Taxpayers who earn below £45,000 can receive a savings interest worth £1,000 each year.
If you are a higher rate taxpayer who earns around £45,001 to £150,000, you can earn £500 of savings interest each year. If you earn more, you won’t receive any allowance.
You can set up a cash ISA account at any bank in the country. There is no setup fee. It is ideal for individuals who pay taxes using their savings.
Which option is better?
While the cash ISA sounds like a good investment, a funeral plan is still the better choice because the cost of funeral services tends to inflate each year. Experts estimate an annual £2,000 increase.
Your savings from your cash ISA account might not be enough to cover your funeral expenses when the time comes. By choosing to invest in a funeral plan, you can lock in the current rate of the funeral director service provider.
There are hundreds of companies that provide affordable funeral plans. Find one that offers the most suitable deals for your funeral needs. More importantly, make sure that the company is certified by the Funeral Planning Authority.
Try to invest in a funeral plan as early as you can because the prices tend to increase quickly. By availing of a plan today, you can secure better rates and feel more at ease knowing that you’re prepared for the inevitable.