Families taking out £576m in payday loans to cover the cost of funerals!!
Meaning a massive 2.7 million have had to borrow to pay for a funeral.
The increasing cost of funerals means that one in four people ended up having to take out some kind of loan to pay for the bill after a loved one passes away.
The figures, from the British Seniors Insurance Agency, should perhaps come as no surprise, because between us we have spent £4.8 billion on funerals over the past five years, and the average funeral costs £3,733: nobody has this kind of money lying around. As a result, £1.6 billion of this has been borrowed.
While others have been able to use personal loans, some people are able to borrow from family and friends, However, plenty more have had to turn to expensive credit cards, and a very worrying 1.2 million people have had to borrowed a total of £576 million from payday loan companies. People aged between 18 and 34 found it particularly hard to meet the cost of a funeral, so 44% of them took out a credit card to cover the cost and 27% used a payday loan.
So why is so much being borrowed?
One factor is the sheer cost of a funeral. A lot of people underestimate how much their funeral will cost, so they don't make any provision for it. Others have been living on a restricted income for decades, and have not had the spare cash to put aside for their funeral arrangements.
A loved ones family and friends are likely to be completely unaware of the rising cost - and the fact it could fall to them to pay it. Research conducted, asked people how they would pay for the funeral of a loved one, and 40% of people said they assumed the cost of the funeral would be able to come out of the deceased person's estate. However it can take a very long time for money to be freed up from the estate after someone dies.
In a few cases, people have put money aside for their own funeral, and a fifth have taken out some sort of funeral plan. Separate research from Golden Charter found that £3.8 billion of funeral plans have been sold so far. But this still leaves a lot of families trying to find the money to pay for funerals.
What can you do to help your loved ones? If you have enough cash to set aside for your own funeral you can take a pre paid funeral plan freezing the cost at today's rate. This can make an enormous difference to those who will already be grieving when they hear the bad news.
Families appreciate the reduction in associated stress where a loved one has pre-planned and pre-paid for their own funeral. Independent funeral directors find that most enquiries for funeral plans received following a family funeral and that is a major reason why pre paid funeral plans have shown consistent growth since 2006.
If you aren't bothered about the kind of funeral you have, it's also worth letting your loved ones know that they don't have to spend a fortune. In many cases people feel the need to pay for a big funeral because they think they are doing the right thing for the person who died, so if you're not bothered, make sure your loved ones know.
If you have elderly family members, it can be a difficult subject to broach but is something that should be discussed. They may be able to set your mind at rest by letting you know you will be looking into funeral plans. Or alternatively if it is a hard subject to bring up you can take a pre paid funeral plan out on their behalf.
These conversations are not nice to have, they are a nicer than suddenly discovering you have to borrow thousands of pounds to pay for a funeral for a loved one while being charged a fortune in interest. To compare the funeral market now you can either click here or contact us on
0330 113 1682