Proven value
A comparison with high-interest building society accounts
Why should you pay for your funeral in advance? Would you do better to put your money in a building society? On past evidence the answer is clearly no.
A *recent survey has shown that the average cost of a funeral had increased by 10 per cent over a twelve month period. The average cost of a funeral in the UK is now £2390, cremation being £2160 and burial (excluding purchase of grave) £2620. The survey further predicts that by 2012 a funeral costing £2500 today will have risen by 38 per cent to £3450. Putting money in a high-interest building society account would not have kept up with these increases. In comparison a Golden Charter plan would have given much better value.
On past evidence a Golden Charter Plan is much better value than a high-interest building society account. If, in 1991, you'd invested £820 (then the cost of an average funeral) in a bank or building society, it would have grown to only £1,246.35† over the next sixteen years - not enough to keep up with rises in funeral costs. The same funeral almost tripled in cost to £2,240, a difference of £993.65 - a costly shortfall.
What about insurance-based funeral expenses policies?
Most insurance policies that cover funeral expenses have two principal disadvantages:
- Lack of personal choice - you can't specify the arrangements.
- Questionable value - many policyholders in reasonable health have lived to a good age and paid more in premiums than the cost of their funerals.
* ASLD Survey Mintel 2007.
† Source: Standard + Poor's Fund Services ®+© 2007. UK savings 2500 + index (January 1991 - 30th November 2007). Past performance is not necessarily a guide to the future.