If you think most goods and services are always going up in price, consider the cost of a funeral. The average funeral cost is rising faster the inflation and most savings plans.
Between 2004 and 2014 the average funeral cost has risen by over 80% and now costs approximately £3,590. This rises to around £6,000 when you add on things like flowers and memorials.
Over the next 20 years the number of deaths in the UK will rise as the baby boomer generation passes through, putting pressure on funeral arrangements in general. It is estimated that by 2020 the average funeral could cost around £9,000. (source: Longevity Centre UK 2014). Click the link to get Baldwin Brothers Funeral & Cremation Society
Given the growing problem of having to pay for costly funerals with very little financial resources, many people have begun to use pre-paid funeral plans to better manage these unavoidable end-of-life expenses.
Exactly like they sound, pre-paid funeral plans are essentially payment plans that allow a person to pay for their funeral arrangements gradually over time, before their actual death ever comes.
While death is inevitable, it is also unpredictable, so this has given countless people the opportunity to be better prepared for whenever that moment comes about.
Ideally, whoever is paying for the pre-paid funeral plan will live a long life and would have paid the entire cost of their own funeral, thus saving their grieving family members from that responsibility in the event of their death, but sadly this is not always the case.
Pre-paid funerals can be a great idea. But now for the tricky bit, not all pre-paid funeral plans are the same so you need to do your homework.
Many of the companies providing these services will hold your money in special trust funds, so in order to avoid having your money abused or outright stolen it will be necessary for you to know how this process works.
If the company will be earning interest on the money you give them, as many do, it will be good for you to learn how and for what purposes they will be using that interest.