Funeral Costs Soar

Funeral costs soar – again

Never have prepaid funeral plans been more important to those left behind.

  • Cost of a funeral increases – up 6.2% since 2011 and 71% since 2004
  • Funeral poverty rises to £117 million, a 38% increase in the last two years
  • Spending on memorials, flowers and limousines increases despite squeezed incomes.
  • How much would your funeral could cost?

Sun Life Direct, the expert in the cost of dying, has today published its ninth annual Cost of Dying Report1. The basic cost of a funeral has risen, up 6.2% from £3,091 in 2011 to £3,284; a 71% increase from 2004 when the research was first conducted, the eighth consecutive occasion the research has recorded a year on year rise2. Burial costs represented the largest increase this year (9.6%) while cremation costs (6.6%) and funeral directors’ costs (5.3%) also recorded significant rises.

The cost of dying (including death-related costs such as probate, headstones and flowers in addition to the basic cost of a funeral) has decreased slightly by 1.9% from £7,248 in 2011 to £7,114, primarily driven by shrinking estate administration costs which a leading law firm believes may be reflective of increased price competition and consumer awareness3.
Worryingly the study reveals that 27% of respondents have not thought about how they will pay for their funeral4. The report also reveals the serious consequences that this lack of planning can have on families as funeral poverty (the national funeral funding shortfall) rises this year to £117 million, a 38% increase in the last two years5. The 17% of respondents who struggled with funeral costs had to resort to serious measures to meet the shortfall with 20% putting the outstanding balance on a credit card, 10% borrowing money from a loan provider, and 9% even having to sell their belongings.
The government’s support system, the Social Fund Funeral Payment Scheme, designed to contribute to the cost of funerals for the most vulnerable in society, is also struggling to meet mounting demand. The funeral funding gap has increased £1,142 from £901 in 2004 to £2,043 in 2012 (a 126% increase in eight years) and the situation is likely to deteriorate further as funeral costs increase, economic austerity continues and the UK population continues to age and grow6.
Despite rising costs and increasing funeral poverty, discretionary spending has risen. Spending on memorials (up 7%), flowers (up 7.6%) and limousines (up 7.1%) has increased; this discretionary spending now constitutes 27% of the cost of the average funeral.

Simon Cox, head of life planning for Sun Life Direct, comments:

“The industry needs to ensure that suitable options are available for people to take financial responsibility for their own funerals. ‘Debt’, ‘despair’ and ‘distress’ are common hallmarks of arranging a funeral and there is no light at the end of the tunnel to suggest that funerals will become more affordable. Moreover, a difficult economic climate and increasing demand on public services make further state support unlikely. The vulnerable are too poor to die and we cannot let this situation continue.  We must encourage people to look ahead and start planning in advance.”

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

“There is still a sense in some quarters that one’s death is someone else’s problem. As a forward-thinking nation we must encourage and help people to take responsibility for their own circumstances. National debate on social care in old age is focusing on the role of the individual in financial provision and the matter of funeral cover should not be left out of this conversation. The number of deaths each year is expected to rise by 17 per cent over the next 15 years and the issue of funeral affordability deserves urgent attention if we are to give our loved-ones the send-off they deserve.”

2012 Funeral Costs Soar.