Millions of people have had to take out emergency loans in order to pay for the funerals of their loved ones. Credit cards, personal loans, and even payday loans have been used by people who find they haven’t got enough money to cover their costs.
With about £1.6bn thought to have been spent this way over the past five years. That represents a significant proportion of the total £4.8bn spent on funerals during that period.
Perhaps most worrying is the finding that more than a million people have turned to high-interest payday loans. According to research by the British Seniors Insurance Agency (Bsia), nearly £600m has been borrowed this way over the past half a decade.
Perhaps these stats are less surprising when people’s ignorance of the situation is taken into account. The research suggests that many of us are failing to prepare for funeral costs, with nearly half the population – about 23 million people – making no provision at all. Even within the over-50s age group, nearly a third of people have no financial plan in place.
“Our research reveals the worrying scale of just how many UK adults are failing to get their financial affairs in order and put provisions in place for their death,” said Dave Sutherland, of Bisa.
“The cost of overlooking these matters is clear, with the family members and loved ones left behind put under a tremendous amount of pressure. At what is already a difficult time, many people are finding that their grief is greatly exacerbated by the fact that they have to cover the costs associated with death.
Those questioned as part of the research estimated that, on average, the cost of a funeral is £3,733. The real figure is £4,136 – and Bsia said it expected funeral costs to rise by more than 20% over the next 10 years, to more than £5,000.