How much do funerals cost, and how can they be paid for?

While most people have some idea about what they can expect to pay in taxes in their lifetime, the cost of death, or more specifically, the costs faced by those left behind following the death of a loved one, are something that often go overlooked. 

Though inheritance tax is affecting more people every year, it is still something most of us won’t have to deal with. However, even when Inheritance tax is not payable, the costs associated with a death can still be high and it might come as a surprise to know that the average cost of a funeral in the UK is reportedly more than £4,000. This cost does vary depending on the type of funeral, with a typical burial service costing about £5,000 and an average cremation less expensive at around £3,800. These figures include the costs of the funeral service itself and any burial costs, but also other associated expenses such a funeral flowers and posting an obituary. 

Of course, when a loved one passes away there are a lot of other things to consider in what can be a difficult time and depending on your situation, these costs could be difficult to manage – especially if the death was an unexpected one. 

Planning for a death is not always a particularly pleasant or easy task but it is something that should be done to avoid leaving your loved ones with an additional expense that they might struggle to fund.  

This is something that people are becoming increasingly aware of, and taking steps to avoid, with the number of pre-paid funeral plans continuing to grow. Around 2 million UK adults now have a pre-paid funeral plans in place, with roughly 200,000 new plans taken out each year. Customers are drawn to the simplicity of pre-paid funeral plans, particularly when the option to pay monthly is available as this makes funeral planning inexpensive and unobtrusive. 

However for all their increasing ubiquity, there are limits to pre-paid funeral plans that can leave families with additional costs to fund, even when a plan is in place. As with other financial products, these plans cover specific items but can exclude others. Though details vary from plan to plan, items such as burial plots and headstones are usually excluded, meaning these would have to be paid for separately. And while a plan might offer sufficient cover for funeral expense, it’s possible that on reflection a family might want to make changes or additions to funeral arrangements that are outside the parameters of the plan, leading to additional costs. 

It’s also increasingly common for people to put some savings away with the explicit intention of them being used to pay for their funeral, something they can specify in a Will. While leaving money behind in a Will to cover funeral costs can be a shrewd move, the probate process must be completed before any inheritance can become available to family members or other beneficiaries. 

Following a death, the average time it takes to receive money from an estate is around 12 months. This means that whoever organises the funeral will have usually had to do so long before any money allocated to them to pay for this becomes available. In real terms, this means funding the funeral from personal finances until receiving an allowance or inheritance at a later date. It’s this upfront cost that can make funeral expenses difficult to manage, even if sufficient funds or a large inheritance are due. 

Jim Sisson, Finance Director and Co-Founder of Tower Street Finance, said: “Following the death of a loved one, people are often caught off guard by the cost of a funeral and the immediacy with which they are required to cover these costs. It can leave people in a difficult spot financially during what is already a difficult time as they are often forced to cover the costs themselves until the estate is settled and administered, which can take months. 

“This is why we developed our Executor Loan products, as it allows the executor of an estate to quickly access the funds needed to pay for expenses such as funeral costs without having to dig into their savings or take out a personal loan.” 

Find out more about how an Executor Loan from Tower Street Finance could help you to cover funeral expenses or call us on 0343 504 7100.