Death related costs rise by £400 in the last year

Posted on Wednesday, September 14th, 2011 in Life Insurance

A report from the Sun Life Direct financial service company has revealed that over the last year, the overall costs associated with a person’s death have risen by £400.

The average cost following the death of an individual (including services such as funeral costs, administration of the person’s estate, headstones and death notices) is now at £7,248. The figure is equivalent to approximately three months’ average salary in the UK and is now 20% higher than it was four years ago.

The report goes on to suggest that the increase is largely due to the rising costs of arranging a funeral. The Sun Life Direct report indicated that the average cost of a funeral has risen by 61% in the last 7 years. The report also suggested that the costs will continue to rise in the foreseeable future.

Currently, the average cost of a cremation for people in the UK is £2,720 and the average cost of a burial will be £3,462 on average. Other funeral costs include catering, which is at an average £319, and the cost of flowers, at an average of £144.

More costs which relate to the death of an individual include the administration of their estate, which was currently at an average of £2,292, and a death notice, at an average of £55.

The research also revealed that about a quarter of people (26%) have not yet made any plans to account for the end of their lives. About half of people indicated that family and friends will contribute and help organise their funeral. About 20% of people indicated that they would struggle to meet the costs of their funeral.

A spokesperson for the Sun Life Direct insurance company suggested that many people are confused about planning for the end of their life, adding to many other related ‘later life issues.’

Simon Cox from Sun Life Direct said: “Many people are sleepwalking into a financial nightmare, leaving their end of life plans to either their families, the state or no one at all. As a nation we need a wake-up call. Our research indicates that although there is indeed openness to talking about death, action is still greatly lacking.”

At the same time, inflation has risen again in august from 4.4% in July up to 4.5% and the retail price index (RPI) has risen from 5% to 5.2%, adding to the problems faced by many people in retirement.

Kate Woodthorpe, from the University of Bath, is a co-author of the report. She indicated that the death rate in England and Wales is currently at an all-time low. In 2009, the number of reported deaths was 491,348, however, she expects this to rise by 17% in the next two decades. By 2030, there is expected to be an additional 80,000 people who die every year.

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