Funeral Plans – Rapidly Becoming Standard.
The Funeral Planning Authority has announced record sales for prepaid funeral plans for the first half of 2014.
During that period well over 73,000 people transferred savings into prepaid funeral plans – more than in the whole of 2008. Why? Because funeral plans are a much better hedge against inflation that the miserly rates offer by savings accounts.
There are probably over one million people in the UK with prepaid funerals once you add in the sales of firms not regulated by the FPA
According to Golden Charter, the average funeral now costs about £3,500 (as at Septenber 2014), the average funeral plan is currently priced at £3400, including funeral director costs. (We would add that there are some which are substantially cheaper too – but that doesn’t necessarily mean they are right for you. But do watch out for “cheap” plans which miss out vital things – like the undertakers services, which are rather crucial!!)
There are two key drivers to the growth of funeral pre planning:
- The wish to avoid creating additional financial and emotional hardship and discord for those left behind.
- The astonishing rate of funeral cost inflation currently running up to 14 times faster than the rate of interest on a deposit account!
Golden Charter claims growth of 21 per cent over the period, and they claim to be selling more than four in ten of new plans. They are a good firm, but we would suspect that much of this growth is due to the success of their direct sales force. Clearly (unlike us) they will only advise you to buy a Golden Charter funeral plan!
They also suggest that the majority of their market share growth is coming at the expense of Co-ops funeral planning division. It has to be said the Co-op hasn’t had a great press of late.
Whatever the situation, we find it hard to see why anyone would want to buy a funeral plan without the sort of independent advice which we offer – at not cost!