We all expect to feel the emotional impact of a death. This is a fact of life that people anticipate in advance – and while everyone needs time to recover from it, there is usually plenty of help available, from the friends and family who rally around to offer support, to professional grief counsellors, should their expertise be required.
What many people aren’t prepared for are the financial impacts of a death. Unfortunately, help with these can be a lot harder to find. With many people still not entirely comfortable discussing how they feel after someone has died, discussing their financial arrangements can be even more of a taboo.
This is problematic, because the cost of death actually keeps on rising each year. Why is this happening?
The rising cost of a funeral
According to the annual Cost of Dying Report 2011 produced by the insurance firm Sun Life Direct, the average cost when someone dies is now £7,237. This cost has three main components:
£3,091 – Non-discretionary funeral costs including funeral director fees; doctors’ fees; fees for a religious or secular service; and burial or cremation charges. These are relatively fixed.
£1,864 – Discretionary funeral costs including death and funeral notices; flowers; order sheets; funeral cars; catering for the wake; venue hire; and a memorial. These are the costs you have more control over.
£2,292 – Estate administration fees including the cost of professional services such as solicitors and banks to wind up the deceased’s estate. Again, these are relatively fixed.
Source: Sun Life Direct
Taken together, these costs seem worryingly high, and may push people on low- or fixed-incomes over the brink, especially if they have the misfortune to lose several loved ones in a short space of time.
The remarkable thing is that the costs of a funeral given above have risen by 61% over the last eight years, again according to Sun Life. The rise in the cost of dying has been nearly three times the general rate of inflation.
The fees charged by funeral directors have actually played a relatively small part in this, although they have gone up by over 7% in the last year alone (the death rate has been falling since the 1970s as we all live longer, meaning they need to raise prices to stay in business).
Rising funeral fees charged by the Church of England have also contributed to the higher cost of dying, but these are determined centrally by the Church of England itself.
The biggest driver of increases in the cost of dying has been the higher fees charged by council-run crematoria, as two-thirds of Britons are now cremated. According to the Yorkshire Post, these have risen by 117% since 2001, and Sun Life’s report said that the average cremation now costs £705, on top of all the other funeral expenses.
This element of the cost of dying has risen because councils have had to spend large sums of money updating crematoria to comply with new environmental regulations, while some may also be leaning on them as a valuable source of income to compensate for cuts elsewhere in their budgets. Councils have also increased the costs of being buried in their municipal cemeteries, meaning burial will seldom provide a cheaper option.
How to prepare for the cost of dying
The best way to prepare for the cost of dying is to plan ahead, in order to save your loved ones from any additional stress, trauma or embarrassment at what will already be a difficult time.
There are three main ways you can help your loved ones to deal with the costs that your death will incur. The first is by far the simplest; just ascertain that your estate is valuable enough to cover all the likely costs, as funeral expenses are very often defrayed against the cost of the deceased’s estate.
However, this will be more complicated if they can’t take money out of your estate immediately, because it is likely to be contested or your family doesn’t plan to sell your house, for example. Then there are two other main options:
1) Open a bank account specifically to cover the cost of your death – Remember; you will need to tell your loved ones about it so that they know it is there, perhaps even having it mentioned in your will. Also, you need to keep it topped-up with money, as the cost of dying keeps on rising from year to year.
2) Take out a funeral plan – This will cover the cover the costs of your funeral, and lets you choose exactly what you want. For more information, please look at our page on prepaid funeral plans.
There is a third option if you want to avoid the costs of a funeral completely: donating your vital organs to science. This may seem like a radical choice, but the Human Tissue Authority, which oversees organ donation in the UK, are actively trying to increase the supply of organs donated for research so they can further investigate the pathology of Alzheimer’s and other age-related diseases in peoples’ brains. More information is on their website.
Unfortunately, it seems the cost of dying is likely to keep going up, but with a little bit of forward planning, you can take much of the sting out of this for your loved ones when the time eventually arrives.
