Death Shouldn't Mean Debt

03/10/2012 12:45 BST | Updated 02/12/2012 10:12 GMT

Austerity-fuelled uncertainty, reduced funding for public services and squeezed incomes means taking responsibility for personal finances, and planning for the future, has never been more important. Although too often an afterthought, end of life costs should form a central part of this planning; a loved one passing away is a difficult enough time as it is, unattended and unexpected financial costs should not add further upset at a time when loved ones are grieving.

We all know that discussions about these costs can be difficult but it is imperative that they are not avoided, especially as funeral costs continue to move further beyond the reach of the most vulnerable in society, some of whom end up having to rely on family, friends or even the government, to step in.

This year's report into the Cost of Dying by Sun Life Direct reveals that the typical funeral in 2012 now costs £3,284. The same funeral would have cost £1,920 in 2004, representing an increase of 71% in just eight years, far outstripping RPI inflation of 29% in the same period.

Not being able to pay for a funeral can pose serious problems and cost increases are hitting under-prepared families hard. Funeral poverty (the average funding shortfall faced by families multiplied by the number who struggled with costs normalised to the overall UK death rate) in this country now stands at £117 million; an increase of 38% over the last two years. With a projected rising death rate and an ageing UK population, we can only anticipate this figure increasing further in the coming years.

Of those that struggle (17% of those who organised a funeral according to the report) some had to resort to severe measures to meet the shortfall; 20% put the outstanding balance on a credit card, 10% borrowed money from a loan provider, and 9% even had to sell their belongings. Families should not have to resort to such measures but are often left with little alternative. One participant in another study conducted by the University of Bath had to undertake a DIY funeral due to the prohibitive costs and lack of support. She bought her mother's coffin from the internet and picked up the body from the hospital in her car. She subsequently sold the car to generate cash to pay for the funeral costs.

The government support system, the Social Fund Funeral Payments Scheme, can help contribute towards funeral costs for the most vulnerable; however it is an outdated support system at odds with the reality of modern day funerals, struggling to meet increased demand. Those eligible for this scheme will, on average, receive just 40% of the cost of a funeral meaning the funeral funding gap (the difference between the average Social Fund Funeral Payment pay-out and the average cost of a funeral) is still £2,043.

We have to ask ourselves whether the current infrastructure for end of life support is fit for purpose. Something must be done, and quickly. A good starting point would be to address the issue of timing. More often than not, the claimant will need to commit to funeral payment prior to confirmation of whether they will receive support. Bereaved people must know what they will receive before they agree to taking on debts, otherwise we will see the most vulnerable caught in a spiral of debt and distress.