Challenge the taboo of discussing your funeral
Research indicates, perhaps not surprisingly, that the UK population don’t like to discuss arranging and funding their funeral. ‘There is a huge taboo around discussing death‘ – (source: www.sunlife.co.uk).
However, when we look at the data on the average cost of a funeral, it suggests that we should be discussing what happens after we’re gone and making provisions to ensure we don’t land our loved ones with a sizeable debt.
The cost of funerals have increased year-on-year for the last 13 years. This equates to a +112% increase since 2004.
While the average cost of a funeral was £1,920 in 2004, in 2017, this figure rose to £4,078 and it’s projected to reach nearly £5,000 by 2022.
Update June 2018; The government has just announced a further £100 ‘death tax’ on the cost of funerals. Another additional cost for grieving families.
The cash raised is to be used to fund a system of NHS medical examiners, who’ll double-check the cause of death before a body is released for a burial or cremation.
Let’s put the cost of dying into perspective
Over the last decade, while funeral costs have increased by over +70%, wages have increased by just +20%, squeezing peoples’ pockets.
If wages had risen inline with funeral costs, the average weekly wage would now be £714. However, the actual figure is a much less impressive £503.
To put this into context, property prices, which are notorious for consistency rising, have increased at a third of the rate of funeral costs.
Do you have adequate cover in place? Have you provisioned for after you’re gone?
Burials vs cremations
Last year 75% of deaths resulted in a cremation, while 25% a burial. But what’s the difference in cost?
The average cost of a burial is £4,561, whereas a cremation is -27% cheaper at £3,596. Nevertheless, this doesn’t tell the whole story as there are massive regional differences in cost.
For example, in London, the average cost of a burial is a staggering £7,311, while over the water in Northern Ireland the figure is £2,895.
Huge regional differences in the cost of funerals
As with many things, perhaps most notably house prices, there are massive regional swings in the average cost of a funeral in the UK.
You’ll probably not be surprised to read that London is the most expensive region at £5,951, which is +45.9% above the national average. While those in Northern Ireland have the lowest cost at an average of £2,982, which is -26.9% below the national average.
Although the overall UK average cost of a funeral has increased, Northern Ireland have actually seen a -9% fall compared with 2016. While Wales, -15.1% below the national average, also experienced a -4.6% drop.
Why have funeral costs increased?
We all now know, if we didn’t already, that the cost of funerals overall has risen enormously over recent years (112%), but why?
Research tells us the increase in cost is because of a combination of many factors:
- Cuts in local authority funding, leading to a rise in crematoria costs and reduced subsidies for burials
- Wage increases for staff (crematorium staff, grave diggers etc)
- Increase in funeral directors fees
- Increase in the cost of land
- Increase in the cost of fuel
- Lack of space for new graves.
Much more than just funeral costs, (54% more!)
Did you know that the funeral element of the cost of dying only makes up 46% of the total expenditure?
We also have to consider the average amount spent on all the associated costs, which usually includes a wake/memorial, venue, catering, flowers and limo hire – average cost £1,928.
Interestingly, as the cost of funerals has soared in most areas, the amount spent on additional costs (or discretionary costs) has actually decreased in 3 of the last 4 years. Suggesting people are trying to make savings elsewhere.
Then there’s the significant cost of hiring a professional to administer the estate, pay probate etc – average cost £2,899.
When you add everything up, the average cost of dying in the UK is £8,905 (and rising).
How people fund their funeral
In SunLife’s 2017 ‘The Cost of Dying report’, 58% of those surveyed said they had made provisions to pay for their funeral, (down from -62% in 2016).
Of the 58% who had provisioned financially for their passing, 80% had done so sufficiently.
How people fund their passing:
Read our blog post which explores life insurance options for over 60s »
Financial burden on our loved ones
Unfortunately, if 58% of people made provisions for the cost of dying, then 42% didn’t. This often results in financial problems for our loved ones, or worst-case scenario a crippling debt.
1 in 9 families surveyed replied ‘finding the money for the funeral caused financial problems‘.
This segment of the research on average had to find £3,102 to cover costs. Not an easy feat for most of us.
To acquire this shortfall:
- 27% had to borrow money
- 23% had to put it on a credit card
- 13% had to take out a loan
- 12% took out a payment plan with the funeral directors
- 12% had to sell personal belongings
- What’s left took from their personal savings.
Be proactive – make a plan for the future
We speak with 100’s of customers every day regarding making provisions for after they’re gone. It’s what we do.
From our experience, many people find it easier to talk to us about these matters, than to a loved one, as there’s less emotion involved. However, we believe it’s also important to discuss things with your nearest and dearest.
Did you know that just 1% of those surveyed knew all of the deceased’s funeral preferences? Meaning many ceremonies may not be necessarily what the deceased would have wanted.
But, it all starts with a conversion, so don’t be afraid to talk about after you’re gone and funeral arrangements. Although these discussions are never easy, your loved ones may thank you for it one day.
Life insurance is probably much more affordable than you expect
Taking out a life insurance policy or an over 50s plan can ensure all of the above costs are taken care of (and more). Ensuring the financial burden is not passed on to your family.
Often, premiums are just a few pounds a week and with a specialist over 50s plan, there’s no medical required.
At Reassured, we’ll search the market on your behalf to find you the best possible policy quotes – and we never charge a fee.
Be proactive today and get in touch with the life insurance experts.
The data in this post is sourced from SunLife’s ‘Cost of Dying Report 2017’