The Sun Life Direct “Cost of Dying Survey 2012” conducted in conjunction with the University of Bath is due to be published next month. Jennifer Wilcox of Kings Court Trust has a look at last year's survey in advance of the latest findings.
The 2011 survey showed the cost of dying hit £7,248 last year, up by £436 from the previous year, representing the highest level since the life insurance company began its annual research in 2007.
The cost of dying market estimated at £2.7 billion a year is the total average of funeral expenses and the cost for winding up the deceased's estate by an estate administration professional.
At £1,864 in 2011, average “discretionary” funeral costs (extras such as flowers, memorials, limousines and death and funeral notices) rose by 6.8% in annual terms, but fell short of the 2009 figure of £2,156, the survey showed. “Non-discretionary” funeral costs, including all mandatory payments to funeral directors, doctors' fees and fees for burial and cremation, totalled £3,091.
These compulsory payments accounted for the lion's share of the total cost of dying, surging by 61% since 2004 and by 8.2% from 2010 and outpacing inflation. Spending on funeral directors grew by 6.7% from the previous year due to a number of factors including higher service provision, higher fuel costs and the difficult investment climate. Doctors' fees did not change from the prior year, whilst burial and cremation costs added 13.4% and 8.7% respectively, largely due to shortage of burial plots and stringent requirements over mercury emissions from cremations.
Average estate administration spend has increased by 4.2% to £2,292. This is largely due to the rising number of people using professionals – specialist probate companies, Will writers, banks and law firms – to wind up the deceased's estate instead of the earlier practice of people doing it themselves.
Research by Sun Life Direct also found that 20% of people in the UK, or more than 100,000 a year, face difficulties in covering their funeral expenses. The percentage of people who had problems or concerns with payment of funeral costs has doubled to 18% in 2011 from 9% in 2009.