UK funeral debt reaches £142m
A major new study conducted by Royal London highlights that funeral debt in the UK has reached £142m. It also reveals how Brits are struggling to pay for funerals, but showing resilience as they find ways to pay.
The Royal London National Funeral Cost Index highlights that the average cost of a funeral in the UK is now £3,551, and 109,000 UK adults have incurred funeral debt. On an individual basis the average debt is £1,305; collectively this equates to £142m across the UK.
On behalf of Royal London, YouGov surveyed 1,988 people who arranged a funeral in the past five years. Just under half (46%) of respondents said it cost ‘more’ than they expected. Amongst those who said the costs were ‘more’ than they expected, (42%) admitted they had problems meeting the cost.
Despite the cost pressure, only 11% of people in this group chose a cheaper funeral. Over a third (35%) used their own savings to help pay for it; 28% borrowed money from family or friends; and 1 in 5 in this group (20%) went into debt (paid using a credit card or a loan).
Royal London’s National Funeral Cost Indexis a new annual study published in partnership with the Institute of Cemetery and Crematorium Management(ICCM) – the organisation which represents professionals working in burial and cremation authorities and companies throughout the UK.
Data obtained from ICCM for the study highlights how the UK funeral market is polarising society: those who can afford and those who can’t afford the cost of a funeral. Data provided by ICCM illustrates how the cost of a UK funeral differs depending on where you live: charges range from £2,859 for a cremation in Belfast, to £6,899 for a burial in Beckenham, Kent.
The study was commissioned to understand how people in the UK pay for funerals. Founded in 1861 to help people pay for their funerals, this is a key focus for Royal London as it continues to provide life insurance to people today. Currently the mutual is working with others in this space, such as government and charities, to understand the financial barriers that people face. One of the key concerns Royal London has identified is the Social Fund Funeral Payment system.
Royal London says a fundamental review of the Social Fund Funeral Payment system (the UK’s funeral state safety net) is required, but there are immediate ways to ease the pressure. For example, the Fund’s cap of £700, in place to meet ‘other funeral expenses’, should be index-linked to inflation, and adjusted to reflect current UK living costs.
Commenting on the findings, Jerry Toher, CEO of Consumer Division at Royal London Group said:
“Our findings shine a light on the financial pressure people face when they arrange a funeral – bills range from nearly £3,000 to almost £7,000 depending solely on where people live. Our study also highlights the range of coping strategies people employ – from using their own savings to meet the shortfall; to selling their possessions, or taking on debt. We want to highlight the cost of funerals because, as our study shows people are struggling to pay and this is causing household debt. We’d like the Social Fund Funeral Payment system to be reviewed because we believe it’s not fit for purpose. For example, it asks bereaved relatives to commit to significant funeral costs when they have no idea if they will qualify for a payment or how much it might be, with decisions often taking 3 weeks or more.”
Tim Morris, CEO of The Institute of Cemetery & Crematorium Management, said
““The shortage of burial space in the UK is a major concern for the Institute, burial authorities and the public; the latter being indicated in the research results. Spiralling cemetery maintenance costs and the lack of local affordable burial space for the bereaved highlights the fact that cemeteries are not sustainable. The only sustainable option is for the governments in Scotland and England & Wales to introduce legislation that permits the reuse of old abandoned graves. Again, public attitude as identified in the research results indicates agreement.”