The Royal London National Funeral Cost Index 2017 reveals the average cost of a funeral has increased by 3% from 2016 and now stands at £3,784. Funeral debt has also risen to an all-time high of £160 million as people borrow from friends and family or the bank to cover funeral costs and give their loved ones a good send off.

The average debt taken on by people who struggled to pay for the funeral of a loved one was £1680 in 2017 – a rise of £380 since 2014.

In 2016, there were almost 600,000 reported deaths in the UK and according to the latest figures from Royal London, one in six say they struggled with paying for the funeral of their loved ones.

The problem of funeral debt is very real and people are going to extraordinary lengths to pay for funeral costs – with one in ten reporting to have sold their possessions to raise the necessary funds.

A common strategy for those that struggle with funeral costs is to go into debt – almost one in four (23%) paid for the funeral by credit card, took a loan out or used their overdraft.

Heather Kennedy, Fair Funerals Campaign Manager, comments, “When someone we love dies we need to say goodbye. Everyone should be able to access a dignified funeral. But with funeral costs rising well above inflation this just isn’t possible. People on modest incomes are left wondering how they’ll pay for a funeral when someone in their family dies. And bereaved people are forced to take on unaffordable debts that cause serious financial problems for years to come”.

The Money Advice Service states, sometimes, the person who has died has already paid for their funeral. Or they’ve left some money in their estate to cover it. If so, the executor of the estate will take care of paying the funeral bill. Otherwise, it is down to a relative or friend to pay for the funeral.

The purpose of life insurance is to provide for your dependants in the event of your death. A lump sum from a policy could pay for your funeral or cover some of the associated costs.

Alternatively, you can arrange to pay for your own funeral through a pre-paid funeral plan. You can either pay either a lump sum or instalments to the plan provider. Your money is either then invested; Into a trust fund with trustees, or in an insurance policy, which is then used to pay for the funeral whenever that turns out to be. The aim of both methods is to safeguard your money until it’s needed, ensuring that it’s used to provide the funeral you have paid for. Plus, with a funeral plan you could fix the cost of your funeral now and pay at today’s prices – so you don’t have to worry about the year on year rising cost of a funeral that is evidenced by Royal London.

The loss of a loved one can be one of the heaviest emotional burdens families can face, but by making the right choices now, you can help make sure it doesn’t become a financial hardship too.

If you want to take advice about protecting the financial future of your loved ones, we can help you. You can contact one of our experts today on 0800 612 8005 or leave us your details and we will call you.

Credit: Royal London National Funeral Cost Index - August 2017