Why the cost of death is rising so fast

The overriding factor is rising costs.

^{Source: Sun Life Cost of Dying Report 2013}

But what goes into a funeral that is rising so sharply in price? The most authoritative work on the subject, also undertaken by Ms Woodthorpe’s team but published separately from the latest report, has the total “cost of death” at £7,600 and rising by about 7pc per year – some three times the wider rate of inflation.

That figure breaks down into the “non-discretionary” or essential costs of funeral directors and fees for cremation and an officiating minister, put at £3,456. These costs are up by 80pc in the nine years since the survey was first undertaken in 2004.

Thanks to the rise in energy prices the cost of cremation has risen at a consistently higher rate – over 5pc per year in all of the past five years – than the cost of burial. Ms Woodthorpe’s research pointed the finger at crematoria operating for profit, and said: “Crematoria used to be run almost entirely by local authorities but now there is an increased presence of private crematoria. This is also contributing to funeral inflation.”

Even so, a burial is roughly £1,000 dearer than cremation.

One of the fastest-growing “non-discretionary” costs has been church fees, which at the Church of England shot up by almost 60pc from £102 to £160 between 2012 and 2013.

The cost of funeral directors has not been rising as fast as other items but this could change. One in five families is unable to meet the full cost of a funeral, and more directors’ firms are going unpaid, the report warned. “Funeral directors are increasingly exposed to the potential of bad debt, which may account for their having to increase funeral costs, with nearly two thirds now asking for a deposit upfront,” it said.

The rest of the £7,600 comprises funereal add-ons such as flowers, transport, printing and other costs associated with the ceremony. The average sum spent on flowers is £160 and a memorial costs an average of £860.

Should you buy a funeral policy?

There are two ways to plan ahead: buy a “prepaid” funeral, or buy insurance aimed to generate an adequate sum at your death.

With the first type of plan you are insured against rises in the future costs of funerals because the plan provider will pay. But not all costs are included, so the schedule needs to be scrutinised, preferably with your executor to hand.

More straightforward are life insurance policies. But here there is the risk of costs having risen above the sum insured. Also, with most of these policies you have to pay a premium each year, however long you live, posing the risk that more will be paid in than out.

But in this circumstance stopping paying would cause the cover the lapse.

Consumer group Which? provides a range of information about funeral payment options. It includes the following insurance-based example, where "a 60-year-old man paying £15 a month to Legal & General would get £2,879 for a funeral after two years. After his 76th birthday, he’d have paid more than the policy covers and would have to continue paying until he died or reached 90."

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