For people on low incomes, the Social Fund provided by the government can be a lifeline. It pays for budgeting loans for people in debt, maternity grants, and cold weather and winter fuel payments.
But in recent years, it has come under growing criticism for failing to adequately help people meet the cost of a basic funeral, as the disparity between increasing funeral costs continues to outstrip payments from the scheme.
Stark figures published by the Department of Work and Pensions (DWP) revealed that only 54% of the 66,000 applications made last year were successful in receiving a funeral payment from the Fund. But most worrying was that the average payment was just £1,225, which would meet just 35% of the cost of a basic funeral, leaving a shortfall of more than £2,000.
Cost of funeral director is the highest cost
The scheme also includes a cap of £700 towards funeral directors’ costs – generally the most expensive element – that has remained unchanged since 2003. Yet funeral costs have increased 80% over the same period.
In November 2012, Citizens Advice Bureau published a report replete with examples of people on low incomes falling into thousands of pounds of debt when faced with arranging a funeral. The report also highlighted other problems, such as a lack of information about funeral payments, speed of processing the payments and confusion around who is eligible for help from the Fund.
With funeral costs increasing by 7% annually – more than double the rate of inflation – there’s a real risk that future generations could be condemned to years of living with funeral poverty.