Rising Funeral Debt – How Funeral Directors Can Help
September 2017

The latest Royal London National Funeral Cost Index revealed the rising level of funeral debt has reached £106 million in the UK, with 1 in 6 struggling with funeral costs. With these latest figures in mind we take a look at how funeral directors can suitably adjust their processes to help limit funeral debt.

Discuss Affordability

With the average funeral now costing £4257 it’s understandable that affordability can be issue. By discussing this with the deceased’s family and friends whilst choosing the funeral arrangements it could help lessen any financial stress during their grieving process and beyond by ensuring funeral plans can be tailored to suit an individual’s circumstances & their ability to pay.

Give Advice Regarding State Support Available

Where a person has died and relatives or friends have financial difficulty in organising a funeral, assistance may be available via a funeral payment from the Government’s ‘Social Fund’ Many individuals may overestimate the financial support available so staff can inform them that the amount an individual receives from this fund is dependent on their circumstances, with the maximum sum payable currently being approximately £1000.

Upfront Payment for Outlays

It is an option for funeral directors to agree external outlays are paid upfront in order to lessen the amount borrowed and minimise risk for the funeral director as a lender. Receiving upfront payment for external costs such as flower arrangements, venue hire & council fees ensures that the only potential risk involved with unpaid debt is incurring a loss on the businesses own time and services.

Encourage Prepaid Funeral Plans or Insurance Cover

This option allows little to no debt to be incurred by the next of kin since the deceased will have paid for the majority of the funeral service before their passing. By promoting this option via marketing efforts the industry could help tackle funeral debt by encouraging all sums to be settled by the individual prior to them passing away. Efforts to promote pre-paid funeral plans will also be supported by the Scottish Government’s 10 point Funeral Cost’s plan

Where pre-paid plans or insurance policies aren’t in place and the next of kin fall in to funeral debt it is important to handle this issue in a sensitive manner. This can be done by instructing a professional DCA (Debt Collection Agency) at an early stage to allow experts to assess the prospects of recovery and advise where recovery would be ineffective therefore avoiding unnecessary cost. Here at AMA, we take an empathetic approach which has been developed through our extensive experience of dealing with funeral accounts. This wealth of experience enables our team to take an approach which avoids distress to the bereaved whilst maximising possible recoveries. We have a dedicated Customer Assistance Team made up of our most experienced collection staff, set up specifically to handle cases of a particularly sensitive nature. The team always seek to arrive at an amicable settlement agreement which takes in to account both the impact on the business and the debtor’s unique financial circumstances. The success of this new team has resulted in increased recovery rates and a corresponding reduction in queries from debtors.