Millions likely to be hit by significant financial shortfall with over 50’s plans

Average shortfall for funeral costs is £1,525

Press Release:

  • Over half of over 50’s plan holders unaware their plan won’t cover the full funeral costs
  • Families of millions of over 50's plan holders face a future funeral shortfall  

Over 50’s plans have an average shortfall each of over £1,5001 when they are used to fund the cost of a funeral. In new research, we found that more than three quarters (78%) of over-50’s plan holders took out their plan, with a view to it paying for their funeral costs.   

Worryingly, over half (51%) of those who intended to use their plan to pay for their funeral is unaware there will likely be a shortfall.2 Unlike some funeral plans, which fully guarantee the costs, over 50’s plans pay out a cash sum when the individual dies, which may not cover the average cost of a funeral.

With 380,000 UK adults taking out over 50’s plans annually, millions of families face an eventual shortfall when it comes to funding their loved one’s funeral. 

One in eight adults in the UK has no cash savings whatsoever and a quarter has savings of less than £1000.3 

Almost one in five plan holders (17%) would rely on a credit card to fund an unexpected shortfall of £1,500. More than one in 10 (13%) said they would take out a loan to find the money, while 9% said they would not be able to pay their household bills.  

Despite having already taken out an over 50’s plan, a quarter (25%) of plan holders don’t know the difference between their over 50’s plan and a funeral plan. One in five (19%) of those questioned opted for an over 50’s plan instead of a funeral plan because they thought it would work out cheaper overall.  

In addition, over a third (37%) chose an over 50’s plan because they could pay in low-cost instalments and more than a quarter (27%) thought it looked like a sensible investment for their family or beneficiaries.  

Matt Howells, Managing Director of Co-op Legal and Later Life Planning, comments: “Our research shows that many people take out over 50’s plans to cover the cost of their funeral, but are unaware that some over 50’s plans are not linked to inflation. This means that it’s more than likely that loved ones will be left with a financial shortfall to cover the cost of the funeral

“What is more, people opting to pay for their over 50’s plan because it’s a way of spreading the cost, may not have thought about other options such as those funeral plans which cover the full cost of a funeral, and offer a monthly payment option at the same time.” 

Andrew Hagger, Independent Financial Commentator, adds:  “The way an over-50’s plan works is that you pay in a fixed amount each month and in return, are paid a fixed sum or benefit (payable to your estate) when you die. What’s paid out depends on the age you take out the plan.   

“With these products, there is no cash value until a valid claim is made and if you decide to cancel or discontinue the monthly payments outside the cooling off period, in the majority of cases you won’t get any money back. If there are any missed payments, this may also mean that the policy will not pay out.  Once this type of plan is taken out, it is common to pay into the plan up until death, so plan-holders could also end up paying in more than they get out.” 4


A 50 year-old taking out an over-50’s plan with the Post Office Life Cover paying a monthly instalment of £15 can expect to receive £3,493 on death.  If funeral costs continue to rise at 5% they face a shortfall of £329 in just five years as a funeral would cost them £3,822 should they die aged 55.  This would rise to a shortfall of £2,733 in just 15 years, should they die aged 65. 

A 50 year-old taking out an over-50’s plan with L&G paying a monthly instalment of £15 can expect to receive £5,814 on death.  If funeral costs continue to rise at 5%, they would face a shortfall of £452 in just 15 years as a funeral would cost them £6,266 should they die aged 65.

Top five influences on people taking out an over 50’s plan:

  • Wanted something in place to cover the cost of a funeral (61%)
  • Felt they were at an age at which they should do this 45%
  • Able to pay in low-cost monthly instalments (37%)
  • No medical required to be accepted (35%)
  • Looked like a sensible investment for family/beneficiaries (27%)

Find out more about the benefits of a Co-op Funeral plan over Guaranteed Over 50s Life Cover or a Savings Account.

Co-op Funeralcare internal business information based on six months’ data in 2017. Analysis done on all funerals conducted by Co-op Funeralcare that came from a Funeral Benefit Option on a guaranteed over-50’s plan.  

2  Research among 1,000 over 50’s plan holders conducted by YouGov on behalf of Co-op Funeralcare in October 2017. 

3 Financial Conduct Authority Financial Lives 2017 Report 

Research conducted by Moneycomms for Co-op Funeralcare in October 2017

For further information contact

Lauren Pogson

Senior PR Manager

Sarah Pyatt

Press Officer