Funeral costs leave Britons £142m in debt

10th October 2014

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Britons are living with £142 million of debt after struggling to pay the average £3,551 cost of a funeral.

Figures from Royal London show individuals are struggling to pay for funeral and 109,000 UK adults have incurred debts from funeral costs, with the average debt sitting at £1,305.

Nearly half, 46%, of people who had organised a funeral in the past five years said it cost more than expected and 42% said they had problems meeting the cost. Although a significant number struggled with the cost, just 11% chose a cheaper funeral and 35% used their own savings to pay for it while 28% borrowed money from family or friends. One in five people went into debt, using a credit card or loan to make up the funds.

The Institute of Cemetery and Crematorium Management said the UK funeral market is polarising society between those who can afford the cost of a funeral and those who cannot. The cost of a funeral varies widely depending on the area a person lives; a cremation in Belfast costs £2,859 but a burial in Beckenham, Kent costs £6,899.

Royal London called on the government to review the Social Fund Funeral Payment system, which pays out up to £700 to help meet funeral expenses. The insurer said the amount should be linked to inflation and adjusted to reflect the rising cost of living in the UK.

Jerry Toher, chief executive of consumer division at Royal London, 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 people are struggling to pay and this is causing household debt.;

He added: ‘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 three weeks or more.’

 

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