Martin Lewis Funeral Plans – What’s His Verdict?

Holding a funeral service is increasingly expensive. The average burial service in the UK now costs more than £4,000. As a result, more and more people are turning to prepaid funeral plans as a way to save their loved ones from bearing the financial burden of their own funeral.

But, are funeral plans really worth the cost? Martin Lewis, the founder of MoneySavingExpert, recently weighed in on that question and examined some of the benefits and pitfalls of these prepaid services.

In this guide, we’ll take a closer look at Martin Lewis’ funeral plans advice so that you can make an informed decision about whether this is a good investment for you and your family.

On this page

What is a Funeral Plan?

A funeral plan is an agreement with the plan provider that allows you to prepay your funeral costs. You’re guaranteed a set of services, which usually includes most or all of the required components for a cremation or burial. At the same time, the provider promises that you or your family won’t be charged more for these services, even if funeral costs rise between when you purchase the plan and the time of your passing. 

The advantage of a funeral plan is that the biggest expenses around your death are already taken care of, so there’s little or nothing left for your family to pay out of pocket. That’s a huge relief for many families since a £4,000 expense added on top of mourning can be a major shock. In addition, a funeral plan allows you to arrange many of the key details of your funeral ahead of time, so there’s less for your family to worry about when you pass.

What Do They Include?

The majority of funeral plans include many of the same components. First, most funeral plans cover the cost of transporting your body from your home to your nominated funeral home. However, there are limits on the distance to watch out for, as most plans only cover transport up to 25 or 50 miles.

Second, funeral plans typically cover some of the biggest expenses that come with every funeral. These include the funeral director’s fee, a coffin, and a cremation or burial service.

Beyond these shared features, funeral plans can differ quite a bit. Some leave absolutely no necessary out-of-pocket expenses for your loved ones, while others require them to pay for doctor’s fees and religious services. It’s also important to note that some plans allow you to prepay extra towards special requests, while others require that your family pay these at the market rate at the time of your death.

Martin Lewis’ Advice on Funeral Plans

When it comes to getting advice on funeral plans, there are few people better to turn to than Martin Lewis. As the founder of MoneySavingExpert, Lewis has been at the forefront of vetting consumer packages like funeral plans and helping people across the UK save money since 2003.

So, what’s Martin Lewis’ advice on funeral plans? Let’s take a closer look at a few specific points he makes about whether prepaying for your funeral is worthwhile.

Are Plans Worth the Money?

According to Lewis, funeral plans generally are a good way to plan ahead for your funeral. Thanks to inflation, it’s more than likely that the cost of a funeral service will go up over the next 10 or 20 years. After all, prices have increased consistently over the last several decades. With a funeral plan, you can lock in a price and protect yourself from inflation.

On top of that, funeral plans take away a lot of the work that your family otherwise has to do to set up your funeral. You already have a nominated funeral home, funeral director, and cremation or burial plan. All your family needs to do at the time of your death is to get in touch with your plan provider or nominated funeral director.

Importantly, though, a funeral plan is only as good as the costs it covers. Make sure that any fees that aren’t provided for under your plan, such as doctor’s fees and cremation fees, won’t be an excessive financial burden for your loved ones.

Choosing Between a Funeral Plan and Savings Account

One of the big distinctions that Martin Lewis draws is between putting money into a funeral plan and putting money into a savings account. In both cases, you’re putting away money so that your family won’t have to pay for your funeral out of pocket. So, which one is right for you?

According to Lewis, funeral plans have a few advantages over savings accounts. First, with a savings account, your family would still be fully responsible for making all the funeral arrangements themselves. If prices have increased faster than the money in your account accrued interest, they might find that there isn’t enough money to cover the entire cost of your funeral.

On top of that, money in your savings account is subject to inheritance tax when you pass. So, some of the money might be siphoned off to the government before it can be used to pay for your funeral. Funeral plans, on the other hand, aren’t counted towards the value of your estate.

Understand What’s Not Included

Unfortunately, you’re not likely to find a funeral plan that covers every last expense of a funeral. We’ve covered some of the major expenses that plans typically cover, but what are the expenses that get left out?

The most common expenses that aren’t included in a funeral plan are doctor’s fees (typically between £160 and £180) and crematorium fees. On top of that, many plans won’t cover a minister’s fees if you want a religious ceremony accompanying your funeral. Embalming, which is necessary if your body will be displayed at your funeral, also isn’t included in most funeral plans.

Lewis also notes that, although the initial prices for cremation and burial are the same for many plans, burial services can end up being much more expensive. That’s because almost every funeral plan requires you to purchase your own burial plot and headstone, which together can cost thousands of pounds. You can save some money by buying a plot in a cheaper area or by sharing a gravesite. Your family will also likely have to pay some burial fees to open the grave.

Funeral plans also tend not to cover optional services, even though they’re standard fare for many funerals. That includes funeral notices, order sheets, flowers, and catering. 

Depending on your funeral plan, your provider may offer a cash disbursement to your family to help with some of these costs. But, that usually means that the plan itself covers fewer expenses, so the overall out-of-pocket cost works out to about the same amount.

Instalment Payments Can Magnify the Cost

One of Martin Lewis’ best pieces of advice on funeral plans is that how your pay can dramatically change the cost.

The cheapest way to pay for a funeral plan is with a lump sum payment upfront. That ensures you’re getting the lowest possible price for your plan and that you’re immediately covered by the plan if you pass away unexpectedly. 

You can also get the same price by paying for your funeral plan in 12 monthly instalments. You’re not charged interest if you pay within a year, so this is a good option if you don’t have a couple thousand pounds just sitting around. Keep in mind that if you die before repaying your plan in full, your family will be asked to pay the remaining balance or you won’t be covered. If your family chooses not to pay the balance, the money you paid already will be returned to your estate, but the provider can charge a cancellation fee of several hundred pounds.

Most funeral providers also allow you to pay for your plan in monthly instalments extending out up to 25 or 30 years. This can keep your monthly payments very low, but beware that you’ll pay quite a lot in interest. If you pay for a funeral plan over 25 years, the price of the plan can more than double. In that case, the funeral plan may end up costing significantly more than a funeral purchased at the time of your death.

That said, there is an insurance policy baked into many providers’ plans when you pay over multi-year periods. If you have made at least one or two years’ worth of monthly payments, your provider may guarantee you coverage even if you die before paying in full. Better yet, your family won’t be asked to repay the remaining balance.

Make Sure You’re Covered

Martin Lewis also emphasises the importance of making sure you’re covered by your plan.

To start, most plans put a limit, usually 25 or 50 miles, on how far you can live from your nominated funeral home and still receive free body collection. If you live outside that radius, you’ll still be covered by the plan, but your family will have to pay additional transport fees.

It’s also important to make sure that you’ll still be covered if you move house later in life. Most plans allow you to change your nominated funeral director, but some will charge you a fee for the change. Check the terms and conditions of your funeral plan carefully before committing.

Find a Trustworthy Plan

For better or worse, funeral plans aren’t regulated by the government like other types of money-holding accounts. That said, the Funeral Planning Authority (FPA) is a voluntary regulatory body set up by funeral plan providers.

Providers that are approved by the FPA promise to stick to a code of ethics and regulations, giving you more confidence in the plans offered by these providers. The FPA can also help resolve disputes if anything goes awry when your family tries to redeem your funeral plan at the time of your death.

Still, it’s important to think about what would happen to your money if your funeral plan provider goes bust. If you purchase a plan from an FPA-backed provider that then goes out of business, the FPA promises to help make sure your funeral is delivered by another provider within the organisation. Additionally, be sure to check your contract carefully, some providers will actually refund your money if they go out of business.

Pros and Cons

Conclusion

Funeral plans are a popular way to plan for your end of life and protect your family from a significant financial burden. But, it can be hard to know if investing in one of these prepaid plans is a good option. With Martin Lewis’ advice on funeral plans, you can better weigh funeral plans against other options and fully understand what they do and don’t include. As a result, you’ll be able to make a more informed decision about whether a funeral plan is the right choice for you.

FAQs