/ Health, Money

Is dying too expensive?

Coffin / funeral scene

Benjamin Franklin’s famous comment says that ‘In this world, nothing can be said to be certain except death, taxes … and an annual hike in the cost of dying.’ OK, I added that last bit in but it’s a truth that’s hitting us hard.

Reading the annual Sun Life ‘Cost of Dying’ report, which came out yesterday, I was reminded of practical implications of losing a loved one. When added together, the ceremony, flowers, a headstone, and probate, has hit an average of £7,622 – a 7.1% increase on the price it was last year.

This is really worrying news. Our analysis of national data shows that more than half of funerals are currently paid for through savings, rather than with a funeral plan or other insurance product.

Pension pots fund funeral plans

Considering that the average wealth of a household over the state pension age is only around £18,000, the cost of a funeral now takes up more than a third of the average retired household’s assets.

Even more concerning is the fact that the net wealth of all households where the head is in a ‘routine’ occupation currently stands at less than £4,000 – a figure that’s well under the current cost of dying.

In addition to these seemingly ever-increasing costs, Which?’s ongoing research has found evidence that the financial pressures that Sun Life describes are all too often compounded by failures on the part of companies and government services to support people who are bereaved, or trying to plan for the end of life. An interviewee told us:

‘Each savings provider had different standards as to the level of formality required to release the funds. Some wanted a probate letter only or a copy of the will. Also they varied in the amount of time they took, [and] these inconsistencies even existed within the same organisations who sometimes gave out contradictory information.’

Bereaved and broke

We’ve found you have encountered issues managing probate and accessing funds, changing names on banks and utilities accounts, and accessing companies’ dedicated bereavement phone lines after the loss of a loved one. Another of our research interviewees told us:

‘The main problems are that the paperwork is complex and takes up a great deal of time. It’s the system itself, rather than the people involved, and getting a solicitor makes very little difference to the time or costs.’

How have you coped when arranging funeral plans for a loved one? Are you worried about how your family would cover the costs and do have a funeral plan in place to elevate this worry?

Comments
Guest
Barrington says:
8 September 2013

There is an extremely steep learning curve within a very short space of time when somebody dies (especially when their deaths are suspicious due to possible negligence by the NHS) to deal with the various problems.

The principal problems with insurance companies is that they cannot be trusted when people are a live let a lone when a person has died.

For example people being ripped-off by insurance companies for example; contents- and health insurance is just a couple of examples, which is why I would never have a funeral plan.

Did Which? Magazine, ask the various insurance companies how many policies have never been paid out, despite that the person has died, because the figure should be 100% and to give an indication how objective this artical is?

Only people who are incompetent blame the system, which is why the public sector usually blame the system instead of individuals for example Social Services & NHS – Thousands of premature deaths every year and virtually nobody being held accountable: prosecuted and jailed, but if a single death was caused by a non-medical professional than they would be jailed, but because medical professionals, politicians and civil servants create the law it is virtually impossible for any medical professionals to be prosecuted let alone jailed for anything.

This is because for example; the public sector; NHS, Civil Servants and Politicians etcetera write the laws and guidelines with far too many loop-holes.

If Which Magazine is going to say that my reply is irrelevant than people should be able to get funds from the government for example legal Aid and compensation when NHS is probably at fault and help towards sorting out the complex problem of a funeral instead of most people having to struggle. Has Which Magazine asked what advice does the Coroner’s office give because it is insufficient?

This article appears to be biased – promoting Insurances’ Funeral Plans and blame the system.

Recently, because of a family funeral I was wondering how do most people pay for funerals, which cost thousands of pounds because most people live from; pay cheque to pay cheque almost, and don’t have thousands of pounds spare for any thing, let alone a funeral.

Too many people don’t earn enough to pay for Funeral Plans because probably they aren’t paid enough (unemployed due to politicians and the public sector – wasting millions and maybe billions – for example the latest thing is writing off at least £35 million on one project – The higher the national debt and more taxes collected the fewer the number of jobs – basic economics) and bills are escalating too fast and too high whilst politicians are subsidizing the rich for example the bankers with their million pound yearly bonuses and writing-off taxes for the the rich etcetera.

Guest

Thanks so much to everyone for these really insightful comments. Barrington – I absolutely agree, funerals plans and insurance products can mitigate the financial pressure for some, but our research shows that they are out of reach for many of the people who need them most. Unless Funeral Directors find some way of capping costs, or the government increases the level of the Social Fund payment, we’re going to see increasing numbers of people pushed into debt following bereavement.

Guest
Barrington says:
12 September 2013

Shortly after writing my previous message I realized that I missed an important point:

Actually and literally probably thousands of people die prematurely each and every year, and those are only the ones which the NHS and the government directly or indirectly admits to.

Premature deaths happen so frequently which is probably why the NHS and the government have got a name for premature deaths.

Prehaps Which? Magazine could ask the Department of Health, NHS and Dr. Foster: –
1: How many families have been notified that their family member have died prematurely?
2: How many premature funerals has the government and the NHS etcetera paid for in full?
3: What percentage of premature funerals have the government and the NHS etcetera paid for?

The politicians get rid of the Red Tape for funerals whenever they want to, for example Margaret Thatcher’s funeral – It is about time they did the decent thing for everybody else, and back date payments with interests for premature deaths for example.

The NHS’s and Government’s definition of premature deaths as far as I am aware are people who die in hospital who should have lived if they were given; Proper Duty of Care and Best Practice.

I think also that when somebody dies that creditors should only be paid up to the date when somebody dies, when they have been notified within a reasonable period. For example are banks and credit card companies allowed interest to increase on any debt outstanding after somebody has died?

The creditors are then paid from the estate after it has been dealt with.

It should be illegal for banks and building societies and other financial institutions to use unnecessary delaying tatics. For example ask one question and when they receive the answer then ask for some more information – maximize the amount of money they make from the situation. Instead initially asking for all relevant information to shorten the process.

I think that some of the principal reasons why people don’t plan their funerals; they can’t afford it and it is a taboo subject (people are worried about dying). The situation will be worst in the future because almost impossible to buy own houses for most of the next generation: relatively low pay (buying power getting less every year), fewer jobs (most things nowadays are made in China), bills and transport far too high, and getting higher every day.

Wills should probably be recorded by a solicitor because what happens if somebody steals it, alters it or it wasn’t done correctly – the wrong person or organization could receive part or all of the assets?

Ideally, when somebody dies it would be excellent if there was a single place were a person could go to for all the funeral problems to be sorted out. Citizen Advice maybe one useful organization. I have forgotten the major Breavement organization in the UK which provides telephone help and template documentations etcetera but if I findout I shall post their details after getting authorization because obtaining the correct information quickly is important if the coroner’s office isn’t involved.

Could Which? Magazine on their website create a type of Funeral Care Pack with template documentations and relvant addresses where people can get relevant information quickly?
This is because I think the period is only about a week when the Coroner’s Office isn’t involved.

Somebody below ask Funeral Directors to state what their problems are:
It wouldn’t surprise me if they said labour transport costs and fewer people dying.

Guest

You can lodge your finalised will with the Probate Office for a fee of £20 and prevent your unscrupulous relatives getting hold of it to check on their inheritance.

http://www.justice.gov.uk/courts/probate/depositing-documents-for-safe-keeping

Guest

There are still solicitors who will put ridiculous Latin phrases and references in Wills which are unnecessary and which are presumably just done to ensure that the job of sorting it out goes back to them. Beware of paying for the time spent there. Some solicitors will do a fixed rate price. Ask around for recommendations from friends. You need to have confidence in who you give the job to if you are not going to do it yourself.

Guest

A lot to ponder about in this one and, while possibly an uncomfortable topic for some, I think it is good to open up this subject and reflect on its implications both for ourselves as individuals and for society at large.

The big problem faced by many people who are left to deal with the estate of someone who has died is that many expenses arise immediately and need to be settled promptly while access to cash is extremely restricted until the initial formalities are negotiated. Bank accounts get frozen so payments might go in but money is not available to pay the household bills that still keep on coming until action can be taken to sort them out with the plethora of creditors [some of which might be unknown at first]. Banks will not usually release funds until a grant of probate [or letters of administration] has been obtained and the time that takes depends on whether or not there is a will and, even if there is one, whether or not there are any complications. Funeral contractors typically want payment within a short time of the funeral as their charges usually include various disbursements they have made on behalf of the estate in order to ensure that a timely funeral can take place. There might be no alternative for the personal representative(s) but to take out a loan if there is a realistic prospect that the estate will ultimately be sufficient to redeem it. If that is not the case then the most economical funeral has to be arranged.

The realisation of any assets in the estate can sometimes take a very long time. I have had recent personal experience of being involved with the settlement of a relative’s estate; we are nearing the end of the process but it has taken over two years, partly because of a challenge but largely because of the sheer amount of hard work that has had to be done, at long distance, with not many opportunities to sort things out on the spot. Discovering and going through every document to see what is relevant, and determining the disposition of every chattel, takes an enormous amount of time and effort. It will be covered by the estate but the the expenditure – over and above the funeral and probate costs – has exceeded £10,000 just to keep the property ticking over, meet incidental expenses, and pay for the disposal or transport of goods.

In light of this experience I have come to the view that we all have a duty to those who face the burden [a] to keep our affairs in order to the best of our ability at all times, [b] to maintain organised paper records of our income sources and expenditures with key data as to account numbers, references, and applicable dates, [c] to put these documents in an obvious and accessible place, and [d] to tell the person(s) whom we desire to fulfil our instructions where everything is – not forgetting to place a sealed envelope on top containing any passwords to unlock computer access. Oh yes . . . and to start de-cluttering the house!

I feel that nobody should, for a single moment, postpone making a will or decide not to make one – the cost is minuscule compared with the consequences of not having one. There are numerous ways in which people can make financial provision for the expenses arising from their death without buying a plan sold by a funeral company or taking out an insurance policy although these do have certain advantages and should not be dismissed. Where there is a partner, a joint bank or savings account can serve the purpose of enabling access to liquid funds with the minimum of formalities [most other arrangements require the production of a death certificate before funds will be released and if the death has required the intervention of the coroner this might take a fortnight or more]. My own judgment would be that a minimum of £20,000 needs to be available on easy access to at least facilitate the process. This is a staggering amount for many people to have to put aside but any less and the relatives will be put under great strain financially and emotionally. The people left to deal with estates nowadays are often elderly or infirm themselves and not necessarily in good financial health either.

Unfortunately I cannot say that I have yet implemented all my own recommendations, but I have made a will, done some of the admin, and done some of the difficult bits which includes talking about these things with those most likely to be involved. Personally I doubt if the costs arising on death will stop going up although the rate of increase might moderate temporarily; I fear that the increasing involvement of the insurance industry will tend to have an upward influence over time. I am also concerned that some of the schemes available might not be adequately bonded against future cost escalation thus giving a false sense of security.

Guest

Great advice! On the insurance point, one idea that we’re exploring at the moment is around whether Which? should call for all life insurance policies to be put into trust, making it instantly accessible at the moment of death – seems like that could be a good way of mitigating against some of the immediate expenses.

Also, I wonder why it is that you’re able to take some of the steps, but not all of them? We’re looking at doing some more research into the way that people plan for the end of life – I think that the subjective and social barriers that stand in the way of good planning are probably just as important as the bureaucratic ones.

Guest

Several months ago I obtained prices for burial plots in my two local cemeteries but I have not yet visited them to check my preference. I picked up a form for an Age UK funeral plan a few months ago and have done nothing with it yet. I did however make a will about twelve years ago and all my financial, tax information and a copy of my deeds are kept in a back metal file box in the bedroom. My executors are aware of all of this and they say I’m being morbid, I say I’m making things easier for them. I have carried an organ donor card for many years but have not yet put myself on the donor register. There seems to be a reluctance to finish things relating to death.

It would be useful if Funeral Directors contribute to this Conversation. They can tell us about costs for various types of funeral and how funeral plans work in practice.

Guest
Indiana Frog says:
10 September 2013

The news today of the enormous hike in funeral costs is staggering. How on earth are people going to afford this? I would like to see a breakdown in costs to see where all this extra expense is coming from.My own circumstances are that my husband was made redundant three times in his career and consequently our savings and insurances were used up trying to keep afloat and to put our daughters through Uni. Now we are both recently retired and are in the process of downsizing and I don’t think it all morbid to put some money either into a plan or savings for funeral costs because I can’t bear the thought of my bereaved family having to find all that money from somewhere to give us a decent send off. There is no point in burying one’s head in the sand because it is going to happen. We made our wills a long time a go but they need amending now so we shall do that at the same time. But nothing is going to stop the rise of funeral costs it seems so at some point this needs to be discussed. Maybe funeral directors should take the lead on this, maybe the government. I don’t know – these latest figures are scary. I may consider leaving my body to medical science which is considerably cheaper.

Guest

A relation wanted to leave her body to medical science… but they said they did not want it.

Guest

I also heard of somebody being accepted and quite a while after the actual donation, the next of kin received a communication to say they could now collect the remains and arrange disposal of the body. I don’t know how true that is though. Perhaps our forensic scientists should start a body farm, like in the US, where they record in great detail the decomposing of the body in various situations and conditions and as a result are better able to determine time of death Who would volunteer for that farm?

Guest

Is there a Which? Best Buy Funeral Plan?

Guest

No – but if you are thinking about purchasing one we compare them here:

http://www.which.co.uk/money/insurance/reviews-ns/funeral-plans/the-costs-of-funeral-plans/

and (because we know that they’re not for everyone) here is some advice about alternative ways to save:

http://www.which.co.uk/money/insurance/reviews-ns/funeral-plans/alternatives-to-funeral-plans/

You can also record your funeral wishes here, through the Dying Matters Campaign’s ‘My Funeral Wishes’ scheme.

http://dyingmatters.org/page/my-funeral-wishes

It’s important to note however that the National Association of Funeral Directors (who they are partnered with) aren’t the only representative body in the sector, so you’re limiting your options slightly if you chose to go through them.

Guest

Thank you Phillida for the links to the relevant information. I must try and finalise my end of life plans without any further procrastination. I like the idea of making known my funeral wishes in a formal way. I was just going to leave my wishes with my will in my black box. They always find the black box!

Guest
Barrington says:
12 September 2013

I have just realised, that there is a relatively simple solution to funding Funerals.

Why, isn’t it possible for the government to pay the full price for a reasonably price funeral (not a pauper one) and if the family wants to pay extra money to get a better funeral than they can?

The government could view it as part of somebody’s pension.

It would be cheaper to pay for somebody’s funeral expenses rather than to pay for example; pension, health care / child school fees (teachers and heating school buildings) etcetera for a further twenty to thirty years, instead of paying their funeral expenses.

The government directly or indirectly; waste millions of pounds each year and create far too many unemployed people and then have a cheek to blame unemployed people.
Some people nodoubt die because they have been made unemployed
Some people will probably die because of the bedroom tax also.

If somebody is going to say I am talking balderdash (nonsense). Ask the government how does it estimate how many vulnerable people die each winter, and what would happen if those type of vulnerable people had much less money to spend on food and heating bills – it is common sense what will happen – the government’s death statistics would increase.

Guest

I have just found a very helpful new website set up by the Norfolk & Suffolk Palliative Care Academy at –

http://www.bereadyforit.org.uk

It includes a useful checklist on how to be ready for your own demise. It covers healthcare issues, opinions and options; your end of life care paperwork [medical and legal]; personal communicatuions with your family and friends; some of the deeper, internal, emotions that might be faced; insurance, financial and business arrangements; personal effects; funeral planning and logistics; and extra suport.

This website also includes lots of other useful information, checklists, and links to guide people through the warren of issues and otions. In my view it seems to be a very good place to start if you are hesitating over putting your affairs in order.

Guest
Kathy C says:
16 October 2013

I have been pondering a funeral plan for a while so very interetsed in this excange of information. I have done my will a few years ago through Will Aid. The service runs in November so I hope this is a good time to draw attention to it for anyone who is unaware.
A local solicitor writes your Will, then instead of paying their fee you are invited to make a donation to Will Aid. The suggested donation is £90 for a basic single Will or £135 for a pair of basic mirror Wills

Many thanks K