Rising numbers of bereaved families are being forced to take out loans or borrow from friends to be able to put their loved ones to rest.
The price of a basic funeral — either cremation or burial — has breached the £4,000 mark this year, according to a report by over-50s financial services firm SunLife.
The report found that just 37 per cent of people in the capital and 49 per cent in the North East are leaving enough money behind to pay for their funeral as costs soar.
Across the UK 46 per cent of people leave too little money behind to cover the full cost of their funeral, with bereaved families having to fork out an average of £1,872.
The ‘cost of dying’ has hit ‘unaffordable’ highs. The report found 18 per cent of those who struggled to pay the bill had sold belongings to do so.
The price of a basic funeral — either cremation or burial — has breached the £4,000 mark this year
The study, which interviewed 100 funeral directors and 1,500 households who have organised funerals in the past year, found the cost of a basic funeral — including a coffin, hearse and undertaker fees — has jumped from £1,835 to £4,141 since 2004.
The crippling costs have driven a growing number of families to forego a funeral altogether.
One in five opted for a direct cremation last year, which is where there is no accompanying memorial service and ashes are returned straight to family members. Many say they still held a wake or hosted their own memorial service.
Lindesay Mace, of funeral poverty charity Down To Earth, which ran the study on behalf of SunLife, says that funerals are becoming ‘unaffordable’ for many on middle to lower incomes.
But with careful planning, you can spare your family the agony of financing your send-off. Here’s how you can protect them from huge bills and find a trustworthy funeral plan provider.
Think ahead and budget
The total ‘cost of dying’, which includes professional fees for administering the estate, a basic funeral service, flowers and optional extras such as a party or wake, is now £9,658.
However, the cost can vary considerably depending on the send-off you want — and where you live.
Try to figure out how much you may need to set aside to cover the costs and be mindful that prices may continue to rise in the coming years.
There are three main types of funerals. Burial funerals, where there is a service with mourners, cost an average of £5,077 in 2023. Cremation funerals with a service cost £3,795, and direct cremations were £1,498. It is possible to have a direct burial, where there are no mourners, for £1,657 but these are rare.
Those living in London face the steepest bill, at an average of £5,171 across all funerals, followed by the South East and East of England, where funerals cost £4,643.
Families in London are twice as likely to be plunged into financial stress after finding money for a loved one’s funeral.
A funeral in Northern Ireland is the least expensive, at £3,256, followed by the North West of England at £3,802. Beyond the type of funeral, consider any specific wishes you may have.
Organising a funeral with no guidance can be stressful at an already difficult time.
You may want to alleviate the burden on your family by writing down any music or readings you would like, your wishes for flowers or preferences about where you would like your ashes to be scattered or buried.
Burial funerals, where there is a service with mourners, cost an average of £5,077 in 2023
How to put money aside
There are several ways in which you can set money aside for your funeral to make sure that the costs are not borne by your relatives.
The easiest option is to guarantee that you have enough money in your savings account earmarked for funeral expenses. To ensure that the money will be used in this way, insurer Legal & General says you should ringfence it, leaving clear instructions with family members or a solicitor.
Bank and building societies usually freeze bank accounts when they are notified of the holder’s death.
However, they can allow family to access funds to pay for a funeral, so long as they are provided with a copy of the death certificate and a funeral invoice, according to charity Age UK. This avoids the need to involve the executor or wait for probate. Ask your bank or building society about their procedures.
Pre-paid funeral plans are a popular choice for those who want to think ahead. They allow you to pay for the essential parts of a funeral in advance — including the service itself, a coffin, the funeral director and collection and delivery of your body.
You could also take out an over-50s life insurance policy. The difference between this and a funeral plan is how the payout can be used. With life insurance, your loved ones can spend the money on anything they want, including a funeral. But with a pre-paid funeral plan, the money can only be spent on a burial or a cremation.
Can I trust a funeral plan?
Funeral plans have long been popular with those who want to take the financial burden off their family by paying ahead of time.
One big draw is that you pay for a funeral in the future at today’s prices, meaning you have protection against price rises. However, confidence in these plans has taken a beating after 46,000 people were left with near-worthless arrangements when one funeral plan provider went bankrupt last year.
Safe Hands Plans and its parent company SHP Capital Holdings collapsed and is now being investigated by the Serious Fraud Office. Many face the prospect of losing most of the money they gave to Safe Hands.
But those who buy a plan today with other providers will have more security than before. Since July 2022, when the Financial Conduct Authority (FCA) became concerned that some customers were being exploited, the pre-paid funeral plans market has been regulated. Steve Wallis, of cremation provider Distinct Cremations, says the funeral plan market is now growing again.
He says: ‘Providers now operate to a much higher standard with far tighter financial controls. Customers’ money is now protected by the Financial Services Compensation Scheme (FSCS), which gives real peace of mind.’
If you do take out a pre-paid plan, you will generally have the choice of paying in one go, making instalments over a longer time or paying a fixed monthly amount until age 90.
You should pay for it in one lump sum if you can afford to, so that you only pay for the plan itself, without any interest being added.
The risk of paying over a pre-determined period of time, such as 12 months, is that if you die within that time, the provider will typically refund your loved ones what you’ve paid so far, rather than going ahead with the funeral.
Picking the best scheme
Funeral plans can differ dramatically, so it is important to do your homework.
Use comparison websites to shop around and compare prices, then check that the companies are authorised by the FCA to provide funeral plans at register.fca.org.uk under the section ‘What can this firm do in the UK?’.
You can also see a list of authorised providers who are members of the National Association of Funeral Plan Providers at nafpp.org/our-members.
As long as your provider is regulated and has not gone out of business before July 29, 2022, you should be protected by the FSCS.
Once you have chosen a plan, be aware that there are key elements that may not be covered. These can include burial plots, flowers, the wake and catering. What is covered will vary between providers.
More than a third of adults have not talked about their plans with their loved ones, according to research by MyGoodbyes, an app dedicated to end-of-life plans
Be sure to talk to your family
More than a third of adults have not talked about their plans with their loved ones, according to research by MyGoodbyes, an app dedicated to end-of-life plans.
The app’s founder, James Barrett, says: ‘However formal or informal your decisions are, or even if you don’t know what you want, the most important thing is to talk to your loved ones.
‘Funeral expenses can be a huge burden, so it’s important to be clear about what you want.
‘Loved ones will often go for the most expensive options as they feel that they should.
‘By guiding them on what’s important to you, you can help reduce unnecessary costs.’
For example, you may want to reject embalming, expensive coffins and accessories such as coffin handles, silk lining and flowers in order to reduce expenses (and help the environment).
He adds that discussing plans with family will also give them a chance to raise questions and points that you may not have properly considered.
