Thirty per cent of people in the UK would not be able to afford a funeral for a loved one and would be forced to take out a loan, sell belongings or rely on being left an inheritance to cover the costs, according to the latest research from Tower Street Finance.
The average cost of a funeral has increased by 62 per cent in the last decade to £4,417, a figure which is only set to rise further with predictions expecting it to reach £5,285 by 2024.
A survey of 2,000 UK adults by inheritance specialists Tower Street Finance revealed that 39 per cent of those unable to afford a funeral would have no option other than to take out a personal loan or to use credit cards.
Sixteen per cent said they would need to borrow money from family and friends.
Seven per cent would sell personal belongings, such as a car, to raise the money needed.
But a further 24 per cent admitted that they have no idea how they would raise the funds needed to give their loved one a funeral.
How would you pay for the funeral of a loved one?
- Credit card – 22 per cent
- Personal loan – 17 per cent
- Borrow money from family and friends – 16 per cent
- Inheritance – 10 per cent
- Sell personal belongs – 7 per cent
A further 10 per cent said they would rely on an inheritance from the loved one who had passed away to cover the cost of their funeral.
The research revealed that on average Brits expect to receive an inheritance of £214,000 with 68 per cent saying it will likely be left to them by a parent.
However, for those reliant on an inheritance to give their loved one a funeral there could be an unpleasant surprise as 63 per cent of people do not know that probate, the process of receiving an inheritance, can take up to a year.
Andrew Bartle, founder and managing director of inheritance specialist, Tower Street Finance said:
“It takes an average of 9 to 12 months after the individual dies for beneficiaries to receive their inheritance so relying on it to pay for a funeral just isn’t feasible.
“Aside from funerals, our research found that people are relying on a legacy for a wide range of things – from paying off a mortgage and clearing debts, to covering care costs and university fees or simply so they can afford household bills and being able to retire.
“Having access to an inheritance sooner can therefore be a real lifeline for many and it’s why we launched our Inheritance Advance product, which gives beneficiaries easy and quick access to their legacy with no credit checks and no risk for the beneficiary.”
The award-winning Inheritance Advance product is regulated by the Financial Conduct Authority. It enables beneficiaries to access up to 60 per cent of the value of the net inheritance. There are no credit checks, no charge over property, no personal liability or monthly repayments.
The loan is repaid from the estate funds once the estate is ready to distribute. There is a 2 per cent origination fee, which is capped at £1,500 and can be added to the loan, and a fixed yearly interest rate of 19.6 per cent. Interest roll up is capped at 30 months. Representative 22 per cent APR.
Andrew Bartle adds: “Our research shows that most people believe receiving an inheritance is a straightforward process. But the reality, unfortunately, can be very different.
“Our Inheritance Advance product was designed to provide a solution to this problem and it can be used to pay for anything the beneficiary wants or needs – whether that’s a funeral for a loved one, to pay off bills, home improvements or a treat such as a new car or holiday.”
For more information visit www.towerstreetfinance.co.uk or call 0343 504 7100.