As Britons brace for a potential cost of living crisis, many are expected to turn to long term financial products like prepaid funeral plans to beat rising prices. Already lauded for their ability to freeze funeral costs, prepaid funeral plans stand to offer an even shrewder investment in times of high inflation. By paying for their funeral now with a prepaid funeral plan consumers and their families avoid incurring significantly higher funeral costs later.
The costs associated with dying are well documented for consistently growing at a greater rate than inflation in recent years.
The average combined cost of memorials, death and funeral notices, flowers, order sheets, limousine hire, catering and venue hire leapt on average by a staggering 9.8 percent between 2019 and 2020, according to the Sun Life Cost of Dying Report.
The average cost of a basic funeral service rose by 1.7 percent in the same period.
All of those price rises were calculated prior the pandemic and its economic impact.
So, as UK inflation hit its highest point of 3.2% since 2012, and as The Bank of England predicts a peak of 4% later this year, the cost of dying seems certain to leap again.
Chief executive of Rest Assured Funeral Plans Thomas Loughran commented: “A scarcity of resources caused by the pandemic, the shock of high demand from coiled economies and extensive quantitative easing around the world has set conditions for high inflation.
“While the cost of living is rising rapidly in many places, the cost of dying is no different.
“As a result of high inflation, we expect to see a marked increase in funeral costs and other costs associated with dying over the next 48 months.
“That is why inflation-busting, financial products like prepaid funeral plans are particularly frugal investments in times like these.”
The UK’s Consumer Price Index recorded the biggest jump in prices since records began in 1997 prompting the British public’s expectation for inflation over the coming year to also rise by a record amount.
A survey by Citi/YouGov showed that public inflation expectations for the next year jumped to 4.1% in September from 3.1% in August, the biggest monthly increase since that survey began more than 15 years ago.
Thomas Loughran added: “People a duly concerned. They want to know what to do with their money in the face of rising prices.
“There’s one thing that people should absolutely avoid in times of inflation, and that is to do nothing.
“Money that simply sits in bank accounts often loses value during periods of inflation. The Bank of England’s micro-management of interest rates is unlikely to mitigate those losses.
“Smart investors and savers look for financial products which beat inflation and prepaid funeral plans have not only been doing that for years they will do it more effectively for consumers in the coming years.
“Purchasing a funeral plan may not be top of everyone’s list as they concern over energy bills and food prices, but funeral costs are inevitable.
“Freezing them at today’s prices, as poeple face huge prices hikes across the board, is a financial opportunity that clever long term investors should be considering right now.”