Over one in three families need quick access to cash to avoid funeral debt

Posted in: Research Last updated: 15 Jan 2015

Over 40 per cent of people believe their families would be unable to cover the cost of their funeral without getting into debt unless they had quick access to cash, new research from Engage Mutual reveals.

In a poll of 2,000 people [1] throughout the UK, when given the average costs of a cremation or burial in Britain, over 40 per cent said their family could get into debt to cover the cost if they didn’t have access to the deceased’s estate within a week.

The independent survey commissioned by the mutual, is part of a campaign aimed at financial advisers to highlight how as a Friendly Society, Engage can make quicker claim pay outs of up to £5,000 before probate through a nominated beneficiary option.

Spokesperson for the over 50 life cover specialists, Sales Director Stuart Tragheim, said:
“What’s clear from our research is that when there’s a death in the family, people need access to money and they need it quickly which they can have through our nominated beneficiary option.”

The research also found over three-quarters had made no financial provision for their funeral with two-thirds underestimating the cost of a burial at £4,000 or lower (the UK average is £4,690) and more than half underestimating the cost of an average UK cremation at £3,000 or lower (the UK average is now £3,239) [2].

When the costs were revealed, one in five said it was much more than they thought with over 16 per cent saying they were “shocked” by how expensive funerals are.

Of those who hadn’t made financial provision for a funeral, the main reason was a lack of spare money to save towards a funeral.

Under a quarter said they were young and would think about it later, while four per cent thought the state would pay for their funeral if there wasn’t enough money.

Probate takes around three months for a simple estate , whilst the average length is six months, and for more complicated estates where property is involved, or inheritance tax, it could take a year or more [3].

Yet nearly a quarter thought their family would have access to money from their estate within a month of their death, with five per cent thinking they would have instant access.

The majority (56 per cent) had not made a will, which can lengthen the probate process even further.

“It shows how important protection is and how fast payment benefits such as the nominated beneficiary option, can be a valuable safety net,” added Stuart.

For further details on the Guaranteed 50 Plus Life Cover, which has Defaqto Five Star Rating, contact Engage Mutual on 0808 100 50 75 or visit http://www.engageadviser.com (http://goo.gl/U1w0Yr)

[1] Engage Mutual One Poll Research, December 2014

[2] The Engage Mutual 2014 Funeral Costs Tracker Report based on commissioned research from Brass Insight

[3] Dominic MacKenzie, Law Society’s Probate Section and Partner at Ison Harrison