Brits dig deeper to foot funeral fees

Steep hikes in funeral fees mean bereaved families are being forced deeper into debt.

Recession-battered Brits are struggling to pay undertaking costs, having to deal with debt collectors and even delaying burials until funds are available.

The average cost of a modest funeral hit an all-time high of £2,549 (£3,424 in London) in 2008, up by a third since 2004, according to research company Mintel. Worse still, these prices could rise by a further 38 per cent by 2012.

These hefty increases will especially hit those on low incomes, as government benefits on funeral bills lag behind the actual costs, and bodies are going unburied because the Government is behind on payments.

The British funeral industry is worth around £1 billion per year and some funeral directors are chasing unpaid fees by working with debt enforcement agencies and resorting to tough tactics to make sure they get paid.

In many cases, funeral directors ask for funds up front to cover third party costs such as crematorium, or burial charges, flowers and doctor’s fees. Some undertakers, also feeling the pinch of the credit crunch, are refusing to carry out funerals until the Department for Work and Pensions (DWP) confirms it will foot the bill, leaving some families waiting up to two months to bury their dearly departed.

Lee Parkin from Kensington Financial Management Consultants says: “They say nothing is certain but death and taxes, but the unexpected high cost of funerals often comes as a nasty blow to the bereaved. Most people do not plan for deaths and the sudden expense is forcing people further into debt.

“Funerals are one of those things that nobody wants to prepare for and as a result put little or no money aside for them. People are struggling through the recession and many are faced with redundancy, leaving them juggling their finances - yet they still would like to commemorate the loss of their loved ones without cutting corners.

“We’d encourage relatives and friends to check exactly what is provided in funeral packages before they book. It is an expense most people make under distressed circumstances and so they are less concerned about comparing prices but there are different price tags available, depending on financial circumstances. The Mintel survey shows that nine out of 10 people only approach one company and get only one quote, then use that funeral director. However, it is worth getting two or three quotes from local or independent funeral directors, as there are some cost savings to be made.”

He continues: “Although planning your own funeral might seem morbid, setting aside funds for the inevitable may be a wise idea. Ringing round yourself to get the most cost-effective deal, means you can have the funeral you want, without leaving loved ones in debt. Some companies offer pre-paid funerals, with costs starting at around £2,500 including burial or cremation (Co-Op Funeralcare), but beware as spreading the payments can incur interest rates of up to 25 per cent.”

Bereaved families can apply to the DWP for help with funeral costs if they can prove they are receiving benefits and cannot afford to pay. Around 27,000 people receive cash from the Social Fund every year, totalling £46m. Usually a family gets up to £700 towards the coffin and collection of the deceased, plus another £1,000 for other expenses such as cremation fees.

Kensington Financial Management Consultants is part of The Money Advice Group - one of the UK’s leading financial management companies. For further information or for advice with handling your debts, visit kensingtonfinance.co.uk.