How to pay for a funeral

Have you thought about leaving money for your funeral? If you don’t make provisions, friends or family could be left to pick up the bill.

Funeral candles with people in the background

Leaving money for your funeral may not be the most enticing topic to think about, but thanks to the rising cost of funerals and estate administration, some families struggle to cover these costs when they lose a loved one.

How do funeral costs work and how can you protect your family from being landed with an unexpected bill upon your death?

Funeral expenses

When you die, your burial or cremation will need to take place within days – and be paid for promptly. The person organising the funeral (usually your closest living relative) may have to cover the bill.

If your assets (property and belongings) need to be sold off and any debts paid off first, your relative may have to wait months - even years - to get reimbursed. If your assets don’t cover your debts they may not be reimbursed at all.

Paying for funeral costs

The cost of funerals is rising. You can use our UK funeral calculator to see how much a burial or cremation could cost in your area. Below are some common ways people leave money to cover the costs of their funerals.

Savings

It seems like a good idea to leave money in a savings account or similar to pay for your funeral. But unless it’s a joint account, your relatives might not be able to access it after your death, at least not for several weeks.

Some banks and building societies release funds quickly, but others will freeze an account until probate is granted – which can take weeks. Probate is the legal authority to wind up the affairs of someone who has died, find out more about the probate process here.

Funeral plans

A funeral plan is an agreement that ensure your funeral expenses are paid quickly and fully. If you have a funeral plan the cost of your funeral will be covered by the plan and the funds paid directly to the funeral home.

You pay a set amount to for the funeral plan, and the plan provider pays directly for your funeral when you die. You can pay for a funeral plan either with a lump sum or in instalments over several months or years.

The main benefit of a funeral plan is that the cost of your funeral is covered regardless of what happens with the costs of funerals between now and when you die – even if it ends up costing more than you paid into the plan.

It’s worth remembering that there may be funeral costs not covered by the plan, such as a burial plot or flowers.

Does life insurance cover funeral costs?

Some people take out over-50s whole of life insurance to help pay for their funeral. You choose the amount you want to be insured for (the total amount that gets paid out), then you pay a regular premium until the policy pays out.

It’s a good way to spread the cost, even though there’s no guarantee that the amount you are insured for will cover the full cost of a funeral when the time comes.

If you have over-50s whole of life insurance with a friendly society, and have named your relative as a nominated beneficiary, he or she can usually access up to £5,000 to help pay for your funeral.

Some whole of life insurance also includes a specific funeral funding option which may give an extra payment towards funeral expenses.

Beneficiaries do not usually have to pay tax on payments from a life insurance policy.

Protecting your loved ones from having to deal with funeral costs after your death is a thoughtful and caring thing to do. Find out more about funeral costs in your area with our funeral costs calculator or find out more about gifting and inheritance tax.

Note: We take care to ensure Talking Finance content is accurate at the time of publication Individual circumstances can differ so please don’t rely on it when making financial decisions.