Although you might think that covering some of the cost of your final expense might be helpful to your family, if you are receiving benefits doing so may impact your eligibility for certain means-tested benefits.
If you are receiving means-tested benefits, such as Pension Credit or Income Support, you will have a maximum allowable capital limit that you must not exceed. A funeral plan might be assessed as “notional” money and if the cost of the funeral plan takes you over your capital limit, it could affect your eligibility for these benefits, potentially leaving you worse off in your daily life.
Also, if you are receiving means-tested benefits, you should be aware of the DWP’s Funeral Expenses Payment scheme. The scheme provides financial assistance to help cover the cost of a funeral for people on a low income and who meet eligibility criteria.
Funeral Expenses Payment can help pay for some of the costs of the following:
Although the assessed benefit might not pay for everything, it could be worth more than a thousand pounds AND you can also get up to an additional £1,000 for any other funeral expenses, such as funeral director’s fees, flowers or the coffin.
BUT, if you own a prepaid funeral plan, even the very cheapest, the maximum Funeral expenses Payment drops to…£120!
In short, your spouse, partner or close relative could miss out on hundreds if not thousands of pounds if you buy a plan to help with funeral costs!
So, seek advice from a qualified professional or organization before making any decisions about how to cover the cost of a funeral, especially if you are receiving means-tested benefits. They can help you explore the options available and help you make an informed decision that is right for your individual circumstances.
funeraldirections.com is a guidance, help and ideas website for those at need, planning ahead or dealing with arrangements after the death of a loved one.