Death means debt for an increasing number of families.
Families are being encouraged to discuss funeral costs and other expenses/ By 2020 these are ex[pected to increase by nearly £1billion. Our members can at least help you to fix some of the costs at todays prices, with the cost of a pretty basic funeral expected to exceed £7,000.
The number of deaths will start to rise again as the baby boomer generation start to die off (yes, that is me too!) After many, many years of falling deaths, 2015 marked the point where the trend starts to reverse.
This will have a big effect on funeral costs and makes it more urgent for families to look at funeral plans to both reduce and spread end of life expenses.
The findings form part of a new report undertaken by the International Longevity Centre – UK (ILC-UK).
The report reveals:
- Funeral costs could reach or exceed £7,000 by 2020, with the cost of a simple funeral projected to rise to £5,226 by 2020.
- Aggregate spending on funerals in the UK could rise 50% to £3.7bn by 2020.
- Funeral debt left for families to pick up is slated to reach a quarter of a billion in less than 20 years.
- With deaths predicted to rise, extra pressure on funeral services will push prices ever higher.Funeral costs could reach or exceed £7,000 by 2020, with the cost of a simple funeral projected to rise to £5,226 by 2020.
- Funeral costs are already soaring and the cost of a simple funeral has grown by 80% from 2004 and 2014.
It’s OK, the kids will pay for my funeral….
The reports message is to plan ahead for funeral expenses. 109,000 people ended up in 2013 stuck with funeral debt at an average £1,305 per person. It will be a great deal more in future with funeral cost inflation currently increasing more than 14 times faster than either inflation or the average deposit account. ILC-UK calculates that based on current trends,funeral debt could reach a quarter of a billion by the mid-2030s: an increase of 76%.
Debt will have an unpleasant impact on families under financial pressure. Currently 14.5 million families would not be unable to afford a funeral at short notice (and they usually are) there was a proper funeral plan in place. Some life insurance may help, though often the detah benefit doesn’t keep up with inflation or pay out quickly enough.
Baroness Sally Greengross, Chief Executive of ILC-UK, said:
“More than half of UK households have less than £3,000 in savings (4) and many will struggle to cover funeral costs. We all need to talk more about dying and ensure we are prepared for the inevitable. State support for funerals is complex and inadequate and without reforms will contribute to more people falling victim to funeral debt.”
Simon Markey, CEO of mutual OneFamily, which helps around 1 in 12 of all UK families to support one another financially, said:
“Our own research shows us that families are coming together more and more to help one another financially. Nearly half of UK adults (48%) (5) who have provided family members with assistance have done so to help them to cover day to day expenses. This report reveals a need for families to look to the future too.
“While the subject of end of life expenses can be a very delicate one to discuss, the findings highlight how starting this conversation could help avoid leaving loved ones with unexpected debts they may find difficult to manage,” he continued.
More than one in five of those who have organised a funeral in the past five years had no financial help from the deceased. Government Funeral Payments have not kept up with rises in funeral costs and in 2012 the average amount awarded represented just 37% of the costs of a simple funeral.
The report argues that borrowing costs are unaffordable for many and that there is an urgent need for more support and greater pre-planning.
Julie, of Best Funeral Plans, said “There is a complete lack of transparency in the funeral plan market with misleadingly worded claims so that its is not clear what is covered, or whether a website offers INDEPENDENT advice or just advice on one firms funeral plans. No one prepaid funeral plan company offers the best plan for everyone, so real Independent advice is essential. It is my job to provide research services to members of Best Funeral Plans and I am really proud of the job they do.”