For richer, for poorer: smart ways to finance a wedding

  • September 11, 2016

How to get a good deal on insurance and loans

My “wedding of the year” will cost significantly less than the £337,049 estimated price of today’s nuptials between Pippa Middleton and James Matthews, which allegedly includes £4,000 for throne loos from the “foremost provider of luxury portable toilets” and £9,000 on champagne. Nevertheless, since I got engaged to my boyfriend of nine years in November (four months to go until our Big Day) I have discovered that nothing that has anything to do with the “W” word, even for us commoners, comes cheap.

Prefix “wedding” to anything — DJ, flower garland or sausage roll — and watch the price rise by 50, 80, or 120 per cent. Even M&S is guilty. Its cult Colin the Caterpillar chocolate birthday cake, which has appeared on David Beckham’s Instagram feed, costs £7.50. Its wedding version, launched this year, where Colin wears a top hat, is £50. Admittedly it’s much more generous in size, but the giant birthday version that serves the same number of guests is 20 per cent less. It remains a bargain, however, compared with the average wedding cake at £300, according to Brides magazine.

Then there’s the white dress. Some “mid-range” bridal boutiques suggest sniffily that you should not even browse if you are unprepared for starting prices of £2,500, plus an “express” penalty if you do not order at least a year in advance; others charge as much as £75 for an appointment to touch the tulle. You get a free glass of bubbly, but no photos are allowed. Even Topshop’s wedding dress is £795. That’s before you’ve invested in the Mr and Mrs embossed satin robes and pillowcases on your wedding night.

Unsurprisingly, people whose brother-in-laws-to-be are not stars of Made in Chelsea are turning in greater numbers to loans to fund even relatively low-key weddings.

The comparison site Money Supermarket has recorded a 53 per cent increase in customers applying for £30,000-plus wedding loans this year.

It says that more than 50,000 people have applied for a wedding loan since January, with 10 per cent requesting amounts higher than £20,000.

The average amount is a more reasonable £8,497, but this is up from last year, when the average was £7,706.

If you are considering borrowing for some or all of the cost of your wedding, it’s important to keep an eye on your credit score, especially if the first step of married life involves a joint mortgage. Even if you are just shopping around for a quote for a loan or credit card, or applying to see if you will be accepted, you can leave a “mark” on your credit file. Too many marks and you will find it difficult to borrow for a home.

Use a “soft search” to get an idea of what you can afford. Comparison sites such as Go Compare have a tool that returns a credit score after you’ve entered a few basic details, which is then used to show you the deals for which you have the greatest chance of being accepted. The search is recorded on your credit file, but lenders can’t see it, so it won’t affect their decisions.

Bear in mind that before you apply for a loan, the cost of it will depend on your existing credit score, so get yours in good shape in advance. The APR (annual percentage rate) advertised is not necessarily what you will receive, and you won’t find out quite how high the interest rate could be until it has been agreed. Only 51 per cent of accepted applicants get the advertised rate. The same applies to how much you can borrow, so do not commit to big costs on your wedding day without being sure that you have secured the loan.

The average cost of a UK wedding according to the Bridebook website is £27,000

Kevin Pratt, a consumer affairs expert at Money Supermarket, says those with a good credit score can borrow between £7,500 and £15,000 at an interest rate of about 5 per cent. “This makes a loan of this kind a relatively cheap way to access extra funds to cover the cost of a wedding.”

Based on the average loan requested of £8,500, he recommends personal loans from TSB, charging 2.8 per cent APR, and Sainsbury’s at 2.8 per cent APR for Nectar cardholders.

The TSB loan is for those borrowing between £7,500 and £20,000.

An alternative way is to take out a 0 per cent purchase credit card. Sainsbury’s has a 0 per cent 31-month interest-free card, but make sure you pay it off before the term ends or the rate shoots up. Also, the interest-free period can vary.

If you are paying a large sum upfront for your wedding, you may want to take out insurance in case you have to call the event off. Before you do, beware of the exclusions. Being jilted at the altar, getting cold feet or “disinclination to marry” as the insurers call it, is not an acceptable reason to claim on your policy. Nor are money troubles, although redundancy may be covered.

“Venue cancellation and supplier failure are the main things to consider when buying wedding insurance,” says Ben Wilson of Go Compare. “This ensures that you’re protected should the venue cancel your wedding, or if one of your pre-booked suppliers, a caterer for example, is unable to fulfil your order.

“To make a claim, you’ll need to have a written agreement or contract with the supplier.”

A decent policy should also cover you if you need to postpone the wedding because you, a close family member or important member of the wedding party falls ill, or has an accident. It is unlikely that you will be covered, however, if the incident occurs as the result of a pre-existing condition.

Wedding insurance can cover rings, gifts, flowers, photography, hired outfits and the wedding cake too. More expensive policies will offer cover for inclement weather.

Most of the main insurance comparison sites do not advertise wedding cover, but has a useful selection, with policies that offer cancellation cover of up to £65,000. Adam Leyton, the editor of the site, says it is important to buy wedding insurance as early as possible in the planning process.

“Most insurers will cover you for deposits already paid, providing there’s no ‘known risk’ at the time, but not all do. Wedding insurance is a one-off premium and policies are generally valid for up to 24 months,” he says.

Policies start from less than £20 and the average premium is about £51. For that price you will get £10,000 in cancellation cover with Debenham’s Gold Policy with an excess of £50, or £17,000 with Wedding Plan’s Diamond+ policy.

Beware that wedding insurance won’t cover your honeymoon.