Rest in Poverty – Cost Of Dying Up AGAIN

The cost of dying continues to rise faster than inflation – read our comments on Sun Lifes’ funeral plans.  Their Cost of dying press release follows:

4^th September 2013

• Cost of dying up 7.1% since 2012 with a significant postcode lottery
• Funeral cost up 80% since 2004 – average funeral now £3,456
• Sun Life Direct projects the average cost of a funeral will rise to over £4,300 by 2018
• National funeral poverty now £131 million – up 50% in three years¹

Sun Life Direct, the expert in the cost of dying, has today published the findings from its 2013 annual Cost of Dying Report². The cost of dying (including death-related costs such as probate, headstones and flowers in addition to the basic cost of a funeral) has risen above inflation³ and now stands at £7,622, an increase of 7.1% on 2012.

Specifically, the average cost of a funeral has also continued to rise well above inflation and now stands at £3,456, a 5.3% increase on 2012 and 80% higher than when the funeral costs survey was first conducted in 2004⁴. Burials are much more expensive than cremations with the average burial at £3,914, costing almost £1,000 more than the average cremation at £2,998.

The increase in funeral costs is commonly attributed to funeral directors. However the increase this year is mainly due to the rise in disbursement fees⁵ – in particular cremation and burial fees which are usually controlled by local authorities. Since 2007 burial fees have risen by 69% and cremation fees by 51%.

Discretionary funeral costs (extra funeral costs beyond the basics such as family flowers, catering, and limos) also recorded a rise. The average cost of funeral extras increased by £83 to £2,006 (4.3%), with the cost of a memorial accounting for a large part of this expenditure (43%) at £864.

These rises come as research reveals many continue to struggle with funeral costs. Almost one in five people (18%) who have organised a funeral in the past four years struggled, with the average shortfall rising from £1,246 to £1,277 year on year. Total funeral poverty (the national funeral funding shortfall) now stands at just over £131 million, over 50% higher than the £85 million figure of three years ago¹.

Moreover, the situation is only anticipated to worsen over the coming years. Sun Life Direct research projects that funeral costs will continue to rise significantly, with the average cost expected to be as much as £4,326 in 2018, proving unaffordable for many more.

The national average cost of dying figure (including death-related costs such as probate, headstones and flowers in addition to the basic cost of a funeral) masks significant variations at a regional level with the average cost of dying in the London area now standing at a staggering £9,556, significantly higher than the national average. The least expensive place to die is Wales where the average cost stands at £6,096.

Melanie Rees, Head of Brand, Sun Life Direct, comments:

“As over 100,000 people struggle to pay for a funeral this year, an important message for everyone should be to do something to prepare, however small. The death of a loved one is a difficult time, and is only compounded by financial worries over how to pay for the funeral. Drawing on savings can be one way to cover the cost. However, as funeral poverty stands at just over £131 million, savings are clearly not an option for everyone. In old age, savings can deplete; advising people to rely on money they may not even have is irresponsible and more financial options should be available. As funeral poverty has increased 50% in just three years, something must be done as a matter of urgency before more families are unable to give their loved ones the send-off they deserve”.

Dr Kate Woodthorpe, lecturer in Sociology, University of Bath, concludes:

“It is disappointing that the number of people who struggle to afford a funeral shows no sign of abating. Funeral poverty has increased more than 50% in the last three years and it is likely that this will continue. The notable postcode lottery of funeral costs, especially in terms of cremation and burial costs, is particularly troubling. People need to realise that death is one of the few certainties in life and must be addressed ahead of time so that plans can be made with regard to who will pay for their funeral, and how. Not everyone has to choose the same funeral and costs can vary, but these need to be discussed with family and friends to make sure proper provisions are made.”

ENDS

¹ 18% of respondents said they would struggle to meet funeral costs and the average funding shortfall was £1,277. Using the annual death rate of about 570,000, this means that over 100,000 people in the UK would have difficulty meeting funeral expenses, putting UK funeral poverty at £131 million. This represents a 50% increase in funeral poverty on 2010’s £85 million.

² Sun Life Direct Cost of Dying Survey 2013.

³ The rate of consumer prices index (CPI) inflation in the United Kingdom was recorded at 2.8% in July 2013 (Office for National Statistics).

⁴ The basic cost of a funeral is made up of funeral director’s costs, doctor’s fees, fees for a religious or secular service and burial or cremation fees.

⁵ Disbursement fees are funeral costs that are outside of the funeral directors’ control: Burial fees, Cremation Fees, Doctors fees, Ministers fees.

Government Funeral Payment is Rubbish – Discuss.

As Funeral Poverty hits a record £118 million this report shows the emotional and financial distress families suffer when “begging” the state for support with the cost of funeral payments.

• Almost  half of 69,000 applications for a Funeral Payment (FP) rejected
• So-called “pauper’s funerals” (Public Health Funerals) expected to rise as it becomes “too expensive for poor people to die”
• Funeral Payment applicants forced into debt by committing to funeral cost of £1,000s prior to finding out if they will receive state support

A Cost of Dying Special Report into Social Fund Funeral Payments from Sun Life Direct and the University of Bath  show that the Funeral Payment scheme, intended to contribute to the cost of funerals for the most vulnerable in society, is failing to meet growing need. Funeral inflation at 7% plus a year does not go well with Government cutbacks: a growing older population is likely to bring ever-increasing pressure on an already stretched system.

There were not far short of 70,000 applications were made for a Funeral Payment last year. Almost half were thrown out, leaving vast numbers of vulnerable people forced to consider a  “pauper’s funeral” or getting into debt.  Even if you do get help from the Governments Funeral scheme a typical sum loan of £1,217 compares rather poorly with 2012s average cost of £3,091 for a funeral, leaving many with an large debt to pay if there is not enough money in the estate.

The study demonstrates that the Government Funeral Payment Scheme is out of touch with reality. The application process through which family members are assessed is confusion and relies on Victorian notions of the ‘nuclear family’, taking no notice of the closeness of actual relationships and whether or not anyone wishes to contribute towards the funeral. Survey respondents were often left feeling confused, frustrated and a sense of shame when applying for help. The process was also felt to be damaging claimants’ physical and emotional health, especially as over 50% were getting treatment for depression, anxiety and insomnia.

The UK is poor in the provision of state support for those who cannot afford a funeral.  Death is considered a private event, not something for which State help should be common.   You can see that this is a painful and humiliating position for those left behind where no provision has been made for funeral costs.

Dr Kate Woodthorpe, a lecturer in Sociology at the University of Bath and author of the report, comments: “Quite simply, it is becoming too expensive for poor people to die. Thousands of the most vulnerable in society are being let down by a system of state support that lacks coherence and is so unclear that some applicants have to resort to alternative means to organise a funeral. One participant in the study decided to undertake a DIY funeral, buying her mother’s coffin from the internet and picking up the body from the hospital in her car. She subsequently sold the car to generate cash to pay for the funeral costs.”

The UK’s ageing demographic is just making the problem of state support for funerals worse every year. The number of applications rejected for a Funeral Payment increased by 6.9 per cent, and this is likely to get worse as the death rate is forecast to rise by 17 per cent each year for the next fifteen years. With rising concerns about pensioner poverty and the cost of social care, having sufficient resources on hand to pay for a funeral is set to become an issue for a growing number of people.   This is where the services of the Prepaid Funeral Review can make a big difference: early planning can put at least basic precautions in place, prevent the erosion of benefits by funds earmarked for funerals (which may earn 0.5% interest when the cost of funeral is rising 14 times faster than that) and put plans in place which will cost nothing if the “poor” relative proves not to be quite as poor as expected.

Simon Cox, of Sun Life Direct, says: “We have to ask ourselves whether the current infrastructure for end of life support is fit for purpose. Something must be done, and quickly. A good starting point would be to address the issue of timing. More often than not the claimant will need to commit to funeral payment prior to confirmation whether they will receive support. Bereaved people must know what they will receive before they agree to taking on debts, otherwise we will see the most vulnerable caught in a spiral of debt and distress.”

Stephen Pett of the Prepaid Funeral Review says “It is crystal clear both that the Government Funeral Payment System is both woefully inadequate and humiliating for those who need to apply.  Things are not going to get any better in the next 20 years, if ever, so it is up to family groups to get advice and organise prepaid funeral plans with the flexibility to deal with these situations if and when they arise without imposing a sudden and unexpected burden on those left grieving.”

Government Funeral Payment is Rubbish