Funeral expenses rise 3.9% to £3,702
The price you pay to say a final goodbye to loved ones also depends on where you live, with a cremation in Greenock costing just £2,976, compared to £7,216 for a burial in Beckenham, Kent.
Simon Cox, a funeral cost expert at Royal London, said: “A loved one’s funeral can be expensive. ‘[It is] a major (and sometimes unexpected) outlay, costing thousands of pounds. The rising cost of an average UK funeral is very concerning; it’s outstripped inflation considerably for many years – almost in line with house price rises, which as we know continue to rise rapidly as demand outstrips supply.”
Funeral costs rose the most in Wales last year – up by 5.2% compared to a rise of just 2.4% in Scotland. On a regional basis, costs rose most in the West Midlands and Yorkshire and Humberside, by over 4% in both regions.
Royal London said it is “not surprising” to see funeral debt rising in UK households, with more than one in ten people (13%) now struggling to pay for a funeral. The average debt incurred due to a funeral now stands at £1,318, which is why people are cutting-back when it comes to paying for essential items such as coffins, and optional elements such as flowers, the insurer added.
“The most striking example is coffins: last year’s Index found people spent £1,108 on average, but the 2015 report shows this has dropped to £989, a decrease of 11%,” Royal London stated.
“Our study shows people are striving to meet funeral price hikes, which they have little control over,” Coz said. “Given the stressful situation, shopping around for a funeral is often not an option. Instead people are coping by cutting back on non-essentials if possible, and reconsidering how loved ones are buried.
“The UK funeral system still displays fundamental failings, which we reported last year. Vulnerable bereaved people are taking on increased debt; and we predict this problem will worsen if steps are not taken to tackle the many, persistent causes driving up the cost of funerals.”
Royal London is now calling for the government to “find better outcomes for bereaved UK citizens” including an overhaul of the Social Fund Funeral Payment, which was designed to cover the cost of a basic funeral for people on low incomes where there was no other relative with the means to pay. The Fund now routinely covers just 35% of the cost of a basic funeral.
Generally thought of as being interchangeable with life assurance, but isn’t. Life insurance insures you for a specific period of time, at a premium fixed by your age, health and the amount the life is insured for. If you die while the policy is in force, the insurance company pays the claim. However, if you survive to the end of the term or cease paying the premiums, the policy is finished and has no remaining value whatsoever as it only has any value if you have a claim. For this reason, life insurance is much cheaper than life assurance (also called whole of life).
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).