A New Tax Year... Is it Time to Look at your Finances?
The start of the new financial year often prompts us to conduct a spring clean of our fiscal affairs. On 6 April 2018, HMRC will implement the changes introduced by the latest budget, and despite these not being as substantial as in previous years, there are still a few points worth thinking about.
A new tax year could be the perfect opportunity to start planning for the future. Whether looking at investment opportunities, budgeting more effectively or putting money aside for a rainy day; the correct fore-planning could leave you in a healthy position in the longer term.
Whilst it’s difficult to predict how long you’ll live, one of the best ways to stay in charge of your finances is by fixing the cost of your funeral at today’s prices.
Since 2004, funeral costs in the UK have risen a staggering 112%. If they continue to rise at the same rate we have seen over the past decade, the average funeral could cost as much as £4,944 by 2022*.
Prepaid Funeral plans vs ISAs
Since being introduced in 1999, ISAs have become one of the most popular ways to save, as they are exempt from income tax and capital gains tax on the investment returns. In addition, you don’t have pay any tax on money withdrawn from an ISA.
Even though the Individual Savings Account (ISA) limit has been frozen at £20,000 for the 2018/19 tax year, it doesn’t necessarily make it the most efficient way to save for funeral costs in years to come.
Parents can also invest in Junior ISAs, which are a tax-efficient way of building up a nest egg for their child’s future, providing a tax-free lump sum when they reach the age of 18. The allowance for a Junior ISA has been increased by £132 in the 2018/19 tax year to £4,260.
Many people are under the impression that savings within a cash ISA will cover the cost of their funeral, however, this is not always the case. As funeral costs continue to rise at a significant rate, you may not have enough saved to cover funeral costs when the time comes.
Freeze Funeral Costs
On the other hand, a Prepaid Funeral Plan from Dignity will protect you against the rising costs of funerals. By taking the sensible approach and securing your funeral at today’s prices, no matter how much funeral costs continue to increase, your loved ones won’t have to pay a penny more for the services provided in the Plan when you pass away.
Furthermore, you can document your special wishes within your Plan for no additional cost, and if your preferences change, you can amend these as many times as you wish. This will provide you with the peace of mind that you have shared your final wishes and will be given the send-off you want, ensuring those that are left behind won’t have to make difficult decisions when the time comes.
We understand that not everyone will be able to pay for a Funeral Plan in one lump sum, so we offer a range of flexible and affordable payment options which are designed to suit every budget. Discover more about our flexible payment options today.
*SunLife Cost of Dying report 2017