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Clients face funeral cost “time bomb”: ILC-UK

Clients face funeral cost “time bomb”: ILC-UK

There is a ticking “time bomb” in future funeral costs, the independent think tank International Longevity Centre-UK has warned.

In a 20-page report, The Funeral Time Bomb, the ILC-UK warned costs were already rising, with an impending increase in UK deaths threatening to push these higher if the capacity for funeral services could not meet demand.

According to the report produced jointly by the ILC-UK and the mutual OneFamily, which incorporates Family Investments and Engage Mutual, the cost of a simple funeral – including burial or cremation, the services of a funeral director and a minister or celebrant – rose from £1,920 in 2004 to £3,590 in 2014.

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The report warned that deaths could increase over the next 20 years – which could push up costs – and called for individual financial funeral planning, improved state support and measures to relieve pressure on burial grounds.

It said: “Deaths in the UK are expected to trough in 2015 at around 521,000, and then steadily start to increase.

“We are at a tipping point – in the next 20 years we project that deaths will increase by 20 per cent. By 2037 annual deaths in the UK are expected to reach over 627,000, a level last seen around 1998.”

ILC-UK said consumers would need to plan ahead on meeting funeral costs, either by using pre-payment schemes or by taking out whole of life insurance.

Baroness Sally Greengross, chief executive of ILC-UK, said: “State support for funerals is complex and inadequate, and without reforms will contribute to more people falling victim to funeral debt.”

Simon Markey, chief executive of OneFamily, agreed, adding: “While the subject of end of life expenses can be delicate, starting this conversation could help avoid leaving loved ones with unexpected debts they may find difficult to manage.”

Meanwhile, Ronnie Wayte, chief executive of funeral plan provider Golden Charter, said the market for pre-paid funeral plans was growing as people tried to plan ahead.

Background

Justin King, chartered financial planner at Dorset-based MFP Wealth Management, said: “Funeral costs are generally irrelevant to many advisers’ clients because these people have money to be advised on. For people without advisers, funeral costs may be an issue.”

Key recommendations
Individuals must include funeral costs in their financial plans for the future, whether using a pre-payment scheme or buying insurance.
State funeral payments should rise to account for increasing prices.
New approaches to burials should be used in an attempt to relieve pressure on burial grounds.

Source: ILC-UK