1. finance
2. personal finance
3. financial planning
4. estate planning

The trouble with dying
The Sun Life Direct Cost of Dying Survey 2011
Welcome to the Sun Life Direct Cost of
Dying Survey 2011. This is our 5th Annual
Survey into the cost of dying and End of
Life Planning.
As an organisation which is neither a funeral director, legal services
provider nor a government agency, Sun Life Direct occupies a special
position in the debate about death and dying. We have valuable
information and insights into consumer behaviour which we are happy
to share with those charged with developing strategies to help defuse
the looming end of life crisis.
2
Contents
Foreword
– The basis for the research
4
6
Why the end of life matters
– Outline of principle findings
8
8
The Cost of Dying
–Non-discretionary funeral costs, discretionary
funeral costs and estate administration costs
– UK national average cost of dying 2007-2011
– Average Funeral Price
– Size of the market
10
10
11
11
12
Changes to The Cost of Dying
– Non-discretionary funeral costs
– Discretionary funeral costs
– Estate Administration costs
– Increases in the costs of cremations
– Sensitivity of costs to economic growth
– Impact of technology
– Legal Expenses
– Funding funeral costs
13
13
14
14
15
15
16
16
17
How do we see the journey to old age and death? – The conventional wisdom
– Stages on the journey to death
– Women are different! – Death: someone else’s problem?
–Can we count on traditional social networks in the future?
18
18
19
21
22
25
Taking control can be empowering
– What does taking control mean?
– Who to talk to?
– Who should foot the bill for old age and death?
26
27
27
28
The basis for a plan
– The effect of affluence on planning
– Barriers to planning
– Those that cannot plan
30
31
34
35
Conclusion
36
About the authors
38
3
Foreword
The report illustrates how people in the UK are approaching the issue of
End of Life Planning against a backdrop of continuing above-inflation rise
in the costs associated with dying.
The cost of dying in 2011 was £7,248. This is £436 more than 2010, and
the highest figure since our annual survey began five years ago. This figure
incorporates a 61% increase in non discretionary funeral costs over the past
seven years.
Our research suggests that nearly one in five (over 100,000 people a year)
struggle to pay for the cost of a funeral. What is more, we appear to have
confused and contradictory attitudes as to who is responsible for – and what
role we, our families and the State should play in – planning for our later years.
Given that the number of deaths each year is set to rise by 17% in the next
two decades as a consequence of the UK’s ageing demographic, the problem
of financing the end of life is set to worsen1. In simple terms, the nation is
facing an End of Life Time Bomb.
We have commissioned research with the principal aim of contributing to the
growing national debate on End of Life Planning, which we anticipate will be
of value to the general public and policymakers alike.
Source:
1
4
omes B and Higginson I (2008) Where people
G
die [1974 2030]: past trends, future projections
and implications for care. Palliative Medicine
22: 33-41.
For more information, contact Simon Cox, Head of
Life Planning at Sun Life Direct on 07977 917 482
or Paul Riddell, Head of PR and Communications at
AXA UK on 01256 798 442.
Foreword
Specifically, the report:
Outlines why we need to be paying attention to the cost of dying now;
Details how the cost of dying continues to rise well ahead of inflation;
Demonstrates that many of us are not paying sufficient attention towards
the broader matter of End of Life Planning (by which we mean the
provision of care, the cost of dying and the handling of our affairs pre
and post death where we are no longer able to do so ourselves);
Indicates who we turn to for advice and support on end of life matters;
Examines triggers and barriers to planning for the end of life;
Suggests why so many of us are not making adequate provision for our
end of life by drawing attention to often contradictory attitudes we have
towards the role of our families, the State and ourselves in planning for
our final years;
Makes observations and suggestions to policymakers and the general
public on how End of Life Planning might be encouraged.
5
The basis for the research
At the beginning of 2011 Sun Life Direct held a round table debate with
recognised industry experts to discuss ‘the trouble with dying’. The debate was
based on the proposed journey illustrated by the schematic below. Observations
and conclusions from this event underpinned the research that follows.
Illness
House
purchase
Divorce
Consciousness of
Own Mortality
Marriage
Death of
a relative
Children
What do they do about it?
Trigger
Plan
Don’t Plan
Driven by Trigger
Need
Education
Apathy
Funeral
Planning
Care
Home
Children
Retirement
Wills
Age
LPA
Death
Review of Plan
Driven by Trigger
Hospice
Cost
Mortgage
Redundancy
Illness
Income
Income
6
Funeral
Planning
Funding
Hospice
Care
Home
Funding
Social
Fund
Funeral
Cost
Estate
Admin
Post Funeral
Re-distribution
of assets
Dying
Personal
Wishes
Onset of
ill health
Foreword
About some key issues
The round table debate allowed us to shape specific issues as a basis for a
new piece of research to broaden our analysis beyond the cost of dying.
The cost of dying was again established using two surveys; the first
contacting a panel of funeral directors in 10 regions and the second asking a
sample of UK adults aged 18 and over who had been responsible for planning
a funeral and administering an estate.
In our new research we asked a sample of UK adults aged 40 and above
about their attitudes and behaviours on the journey towards death. We asked
a range of questions about a number of topics, including;
attitudes towards getting older;
the importance for later life planning;
specific arrangements made;
barriers to planning;
trustworthy and convenient sources of provision; and
who should foot the bill.
Specifically we have organised these into five end of life planning issues:
Five end of life planning issues
Referred to in the
document as:
AWho will handle your affairs if you are unable to care for
yourself due to illness (physical and/or mental) when
you are older?
A – Physical and
Mental incapacity
BWhere you will live and be cared for if you are unable
to care for yourself in old age (e.g., care home, with
relatives, etc.)?
C – Protection of
Assets (Wills)
CWhat will happen to your financial assets and
belongings after you have died (e.g. a Will)?
E – Funeral costs
B – Where cared for
D – Care costs
DHow your care will be paid for if you are unable to care
for yourself in old age in order to prevent the costs
being met from your savings or personal possessions
(e.g. your house)?
EHow your funeral will be paid for/who will pay for it?
The responses to these questions are explored fully starting on page 19 “How
we see the journey to old age and death”. However, we introduce our report
by looking at “Why the end of life matters” followed by presenting the 2011
cost of dying results.
Simon Cox
Dr Kate Woodthorpe
Head of Life Planning
at Sun Life Direct
Lecturer in Sociology,
Centre for Death and
Society at the University
of Bath
7
The projected rise in
the number of deaths
each year equates to an
increase of 17% in less
than two decades.
Why the end of life matters
There are growing concerns about how we talk about, pay for,
plan and organise the process of ageing and dying. Current
arrangements for providing support and advice are already
creaking but we face much greater financial challenges and
potential human misery if we do not address problems now.
The recent Dilnot Commission Report2 has highlighted the problems around the
rising cost of, and the responsibility for, paying for social care as the population
of the United Kingdom ages and the baby boomer generation reaches the
latter decades of their lives. There are a number of other financial and practical
planning considerations related to end of life needs which should be part of this
discussion.
The number of deaths each year in England and Wales is at an all time low, with
491,348 deaths registered in 2009. This was a fall of 3.5% from the previous
year and the first time the number had fallen to under half a million since records
began3. Including Scotland and Northern Ireland, the total number of people who
died in the UK in 2009 was approximately 560,0004.
It is anticipated that from 2012 to 2030 the number of deaths each year will
rise significantly. In England and Wales alone there will be an additional 80,000
people dying a year. The projected rise in the number of deaths equates to an
increase of 17% in less than 20 years.
At the same time, people are living longer. Longer life is often accompanied by
chronic disease and as a result requires more resources from both the individual
and the State. This has created something of a demographic time bomb;
demand for social care is rising, living standard expectations are high, and yet
there remains an expectation that wealth is passed through the generations.
All in all, it is becoming increasingly expensive to age, and to die.
Sources:
8
2
airer Care Funding: the report of the
F
Commission on Funding of Care and
Support (2011)
3
ONS
4
eneral Register office for Scotland, Northern
G
Ireland Statistics and Research Agency
Why the end of life matters
Key for us is the belief
that people should plan
more effectively for their
final years.
A key societal concern is whether the infrastructure established at the end
of World War Two to support people at the end of their life is fit for purpose
today. The relationship between the public, commercial and voluntary sectors
in the resourcing and provision of care, information, advice, support and
services in old age and planning for death is open to debate.
Through our annual reports we continue to raise these and similar questions.
These questions remain acute and will be ever more pressing in future years.
Key for us is the belief that people should plan more effectively for their
final years.
In the following report we outline our principal
findings including:
This year’s headline figures and key changes from last year
How we see the journey to old age and death, including who we turn to
for advice and support on end of life matters
The benefits of planning for end of life and death
The basis for planning, including triggers and barriers
Suggestions on how planning for the end of life might be encouraged.
9
The Cost of Dying
Our research shows that the cost of dying is increasing over and above inflation. The average
cost of dying in the UK in 2011 is £7,248*, equivalent to three months’ average pre-tax UK
salary5. This represents a 20% rise from our first survey published in 2007.
Non-discretionary Funeral costs
These are costs incurred to a varying
degree for every death and include:
Funeral director’s costs
Doctor’s fees for certification
Fees for a religious or secular service
Burial or cremation fees
(Please contact Sun Life Direct for full details of what is included in funeral
director’s costs)
Discretionary Funeral costs
Consumers can choose if and how
much they want to spend and include:
Death and funeral notices
Flowers
Order sheets
Limousines
Catering for the wake
Venue hire for the wake
Memorial, e.g. headstone
Estate Administration costs
Includes:
A discretionary cost of using professional services to wind up the estate of
the deceased
*T
he cost of dying is the total average cost of funerals (non discretionary and
discretionary) and estate administration, assuming all services are used.
Source:
5
10
ONS
The Cost of Dying
UK national average cost of dying 2007-2011
The cost of dying in 2011 is £7,248, £436 more than it was in 2010 and a record
for this annual survey. Low growth in the wider economy is reflected in the
discretionary elements of funeral costs: average discretionary funeral costs
have increased 6.8% to £1,864 in 2011, but this is still lower than the record of
£2,156 in 2009.
£7
,5
00
£7
,0
00
£6
,5
00
£6
,0
00
£5
,5
00
£5
,0
00
£4
,5
00
£4
,0
00
Changes to the cost of dying 2007-2011
2007
2008
2009
2010
2011
Source: The Sun Life Direct Cost of Dying Survey, 2011
Average Funeral Price
Sources:
ONS, DWP Annual Report by the Secretary of
Sate for Work and Pensions on the Social Fund
2010/2011
6
Cumulative increase from base year 2004
Non-discretionary funeral costs are the largest contributing factor to the 2011
record cost of dying figures with a rise of 8.2% over the last 12 months. We first
started research in this sector in 2004. These costs have increased by 61%
over this period. This increase outstrips Retail Price Index (RPI), Wage and
Social Fund Average Funeral Payment inflation which have increased by 24.4%,
22.5% and 19.4% respectively6. When factors mentioned later in the report are
taken into consideration, such as environmental targets and the costs of fuel,
we expect these above inflation increases to continue.
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2004
Social Fund Funeral
2005
2006
2007
RPI CHAW (June)
Source: Sun Life Direct Cost of Dying Survey, 2011
2008
2009
Average Funeral cost
2010
2011
Wage Inflation
11
Our estimate of the size
of the cost of dying
market is £2.7 billion
per annum.
Size of the market
With approximately 560,000 deaths per annum7 in the United Kingdom, based
on this year’s research our estimate of the size of the cost of dying market is
£2.7 billion per annum.
Our research suggests that respondents increasingly feel that the cost of dying is
more than they expect. This year, over half of the 1,505 people surveyed said that
costs were higher than they anticipated.
In last year’s report, many respondents told us that they had experienced
problems or concerns with paying for funeral expenses and had been forced
to find alternative ways to meet these costs including borrowing from family
and friends, selling possessions and taking out loans. In the last two years the
number of people reporting having difficulties or concerns has doubled from
9% in 2009 to 18% this year. If representative of the 560,000 deaths in the UK
this would suggest that currently over 100,000 people are experiencing these
difficulties.
Potentially over
100,000 people each
year find it difficult to
pay for a funeral.
Source:
7
12
ONS, General Register for Scotland, Northern
Ireland Statistics and Research Agency
2009
2010
2011
25
%
20
%
15
%
10
%
0%
5%
Number of people where the costs of funerals caused notable problems
or concerns
Changes to
The Cost of Dying
Non-discretionary funeral costs
Increased by £234 to £3,091
Funeral director’s costs
Increased by 6.7% in the last 12
months. The factors driving rising
costs remain present; increased
service provision, increasing bad
debt, rise in wholesale energy
prices, difficult investment
environment and declining death
rate.
Doctor’s fees
Remained static
Fees for a religious or
secular service
Have risen by 4.6% – having
remained static last year.
Burial or cremation fees
Cremations have increased on
average by 8.7%. Continued efforts
to meet DEFRA mercury abatement
regulations by 2012, together
with local authorities turning to
cremation income following budget
cuts are considered the key reasons
driving cremation inflation.
UK National Average Funeral
Pricing 2004 - 2011
£3,500.00
£3,000.00
£2,500.00
£2,000.00
£1,500.00
£1,000.00
£500.00
Cremation
Burial
Source:
The Sun Life Direct Cost of Dying
Survey, 2011
2011
2010
2009
2008
2007
2006
2005
2004
£0.00
Burial costs have risen on average
by 13.4%. The differential between
cremations and the more expensive
burial, mean a significantly more
expensive funeral. Lack of burial
plots is commonly quoted as the
key driver of price increases with
some press reported cases of a
“postcode lottery” accentuating
the problem.
13
Discretionary funeral costs
Increased by £118 to £1,864
Death and funeral notices
Flowers
Order sheets
Limousines
Catering for the wake
Venue hire
Memorial
Consumers are choosing to spend
slightly more than last year on
discretionary items. Possibly reflecting
a small growth in consumer spending
and confidence, flowers, limousines and
venue hire have all seen double digit
increases in average spend. However,
spending on all of these items still has
some way to go to match the record
levels seen in previous years.
Falls in average spending continue on
death and funeral notices. At £54, the
amount spent on a funeral notice is under
half of that in 2008. In contrast, the trend
towards more expensive memorials has
continued, with the average spend rising
from £637 in 2008 to £794 in 2011. The
memorial is the stand out discretionary
cost, accounting for 43% of the total
discretionary costs.
Estate Administration costs
Increased by £93 to £2,292
14
The cost of using
professional services to
wind up the estate of the
deceased.
Average spend has risen by 4.2%
year on year.
The most notable change has been
a move away from those choosing
to administer the estate themselves.
Solicitors, banks, probate specialists and
Will writers have all received increases
in the numbers using their services.
Changes to The Cost of Dying
Increases in the cost of cremations
This year we asked funeral directors to consider what they perceived to be
the most significant cause of crematoria cost increases.
Our speculation in last year’s annual report was confirmed. Almost half
responded that they believe the cause was the ongoing effort to meet
DEFRA’s mercury emissions abatement regulations by the end of 2012.
We also speculated that local authority owned crematoria might be one ready
source of income for local authorities hit by central government budget cuts.
Over a third of funeral directors surveyed confirmed that they felt this was
indeed the main cause in the increasing costs of cremation.
The other significant reason cited was escalating fuel prices. One in ten funeral
directors surveyed believed this was the main reason for rising cremation costs.
Sensitivity of costs to economic growth
It is interesting to compare the sensitivity of the costs associated with funerals
to the growth of the overall economy. Non-discretionary funeral costs do not
appear to be as sensitive as discretionary funeral costs.
The non-discretionary elements of a funeral have continued to reach record
levels year on year since we started to track them in 2004. These rises have
been at a greater rate than price inflation. This growth in costs has continued
throughout both the recent recession and subsequent period of low growth.
We can only expect that they will continue to rise in future years.
Conversely, discretionary funeral spend has been impacted, most notably
flowers and limousines. This was well documented in last year’s report where
we calculated the value of national total spend on flowers for funerals fell
over £55m to just £61m between 2007 and 2010. This figure has increased
to £67m in 2011. Likewise, the average spend on limousines has followed
the same pattern with an increase of 14% in 2011 after falls in recent years.
Therefore, like the economy, spend on discretionary items is displaying a
fragile recovery, but is nevertheless vulnerable to downturns in consumer
spending habits and confidence.
On the surface it would appear that non-discretionary funeral costs are
price inelastic (i.e consumers would appear to have little option but to meet
the costs quoted). Discretionary funeral costs, however, allow consumers a
degree of control over what they spend on these items or services.
There are ways and means of keeping both discretionary and nondiscretionary funeral costs down. These can range from choosing a cremation
over a burial to conducting some of the responsibilities yourself, for example
hosting and catering for the wake, or overseeing estate administration.
15
Impact of technology
While some of the discretionary items have showed signs of recovery in
terms of average spend, death and funeral notices have continued to fall.
This trend began before the recent recession.
While many of the items covered by the survey remain largely unaffected
by technology and the internet, death and funeral notices appear to be an
exception. The number of funerals that include death and funeral notices
remains consistent, but amounts spent have fallen. The average spent on
a funeral notice has halved in the last four years.
Traditionally, notices appeared in newspapers to pay tribute to the deceased
and announce the funeral. Technology now makes this practice more
accessible and provides more options for bereaved people. For example,
some local newspapers allow you to post obituaries through the internet and
into the newspaper itself for as little as £9.
Interestingly, the average spend on order sheets is £67, an increasing trend
and the highest it has been since our survey started. One reason for this
may be that digital printing now allows for the rapid production of highly
personalised order sheets (in themselves becoming a valuable keepsake),
leading to a higher demand and willingness to pay more for high quality
booklets.
Legal Expenses
Over the 12 months up to when the survey was conducted this year there
was a small decrease in the price of houses. This is important as typically the
house is the deceased’s single biggest asset and is therefore the largest driver
of legal expenses.
Solicitors continue to be by far the provider of choice for assistance with estate
administration and have seen a larger number of people use their services than
last year. This is also true of other providers, with banks, probate specialists
and Will writers all seeing increases in those seeking professional help.
16
Changes to The Cost of Dying
Continuing to increase
in popularity are both
life insurance and
pre-paid funeral plans.
The number of people choosing to administer the estate themselves has
declined. This group of people now account for less than a third of all estates
administered. However, a substantial 94% who did take estate administration
on themselves did not have any regrets (down from 98% last year). This
suggests that those that do have the confidence to take this task on are
happy with the results and potentially save sizable costs.
The rise in the cost of estate administration indicates that professional
providers may have increased their prices. What is more, the increased usage
of professional service providers may suggest a greater level of awareness of
the services they provide, potentially as a result of advertising and promotion.
Both of these factors are possibly a result of the need to generate more revenue
in tough economic times.
Funding funeral costs
From our research we found that over 60% of those responsible for arranging
a funeral knew the funeral preferences of the deceased person, either directly
from the deceased person themselves, from family and friends, or from the
Will. Yet only 58% of those surveyed said specific provision had been made
to pay for the funeral and estate administration costs; 57% of those through
savings and investments.
There are a number of issues with using savings and investments in this way.
Money may not be released before the funeral, due to probate, so a family
may need to find the funding themselves until they are reimbursed by the
estate. Potentially, we also do not save enough. The average level of personal
savings is £1,6848, well below the £7,248 cost of dying.
Continuing to increase in popularity is both life insurance and pre-paid funeral
plans. Both can be effective ways to fund funeral expenses. Pre-paid funeral
plans have seen the largest increase with almost 30% of respondents stating
this was the chosen method of ensuring that funeral costs were covered, up
from 18% in 2010.
Source:
8
ING Direct Consumer Savings Monitor July 2011
17
How do we see the journey
to old age and death?
The conventional wisdom
There are a variety of preconceptions about how we plan and prepare for old
age and death. For the majority of people these preconceptions may include
paying into a pension during their working life, writing a Will (either using a
pre-paid Will writing kit or with assistance from a solicitor or Will writer),
purchasing a life assurance or pre-paid funeral plan, telling family and friends
about what they would like at their funeral, and organising what should happen
to sentimental items that they may own after they have died. Alongside these
actions there may also be an element of anxiety about the health complications
that can accompany the ageing of the mind and body.
Our research indicates that a number of these are misconceptions, and we
discuss these in the next section. However, others are confirmed. Perhaps one
of the most important of these, with consequences that are unexpected and
which we will discuss later, is that as we approach old age and death it is to our
nearest and dearest that we instinctively and overwhelmingly turn. In fact, of the
respondents surveyed who knew all or some of the deceased person’s wishes,
67% had learnt these directly from them.
18
How do we see the journey to old age and death?
Stages on the journey to death
There are a number of reasons why people do, or do not, plan for the end of
their life. These are covered throughout this report, and specifically in relation
to socio-economic background on page 30. Broadly speaking however, a key
finding in the research was that the majority of respondents aged over 60 who
planned did so because they felt they had reached an ‘appropriate age’. The
strength of this feeling, perhaps unsurprisingly, tends to grow as we get older
but is strongest in the 60+ age groups.
Ageing increases the propensity to plan
(respondents who have made an arrangement for the five end of life planning issues)
70
%
40
%
30
%
20
%
10
%
See page 7 for a full description of
these five end of life planning issues.
0%
E – Funeral costs
50
%
C – Protection of Assets (Wills)
D – Care costs
60
%
B – Where cared for
80
%
A – Physical and Mental
incapacity
90
%
Five end of life planning issues
40-50
50-60
Planning Issue D
Planning Issue E
Planning Issue B
Planning Issue C
Planning Issue A
Have not planned anything
60-70
70+
19
In addition, the younger age bands (40-60) demonstrate that certain
triggers or life events can also drive specific action or purchasing behaviour.
Interestingly the relevance of these life events vary depending on the scenario
presented.
What event or reason caused you to make a specific arrangement
40
%
50
%
60
%
70
%
(respondents who have made an arrangement for issue C – Protection of Assets (Wills))
0%
10
%
20
%
30
%
36% of respondents
felt there was an
actual identifiable age
at which people start
thinking about later
life planning; of these
respondents, the
average appropriate
age was 47.
40-50
50-60
60-70
70+
My financial situation changed positively
(more money), prompting a need to plan
Death of a parent
I got married
I reached a certain age where it seemed
responsible to make this arrangement
I became a parent
36% of respondents felt there was an actual identifiable age at which people
start thinking about later life planning; of these respondents the average
appropriate age was 47.
This sense of an ‘appropriate age’ is significant in light of current concerns
over resources at the end of life. One of the key issues outlined in the recent
Dilnot Commission Report is that people are not making sufficient provision
early on in life to fund their latter years. There is therefore a need for a cultural
shift in thinking about an ‘appropriate age’ or time of life for planning for old
age and death, which could be instigated through a combination of State,
commercial and voluntary action.
20
How do we see the journey to old age and death?
There is much scope
to develop planning
related services
for older women
specifically.
Women are different!
Our research suggested that gender has a substantial impact on attitudes
towards planning for death. Overall, women were more concerned than
men about ageing, with 45% of female respondents saying they feared
the consequences of ageing, compared to 35% of men. Interestingly, after
fears associated with health and poverty, men were more concerned about
relationship/libido issues, whereas women were more worried about losing
their looks!
Across the board, in response to concerns about arrangements being in place
for older age, women consistently outnumbered men when indicating that
arrangements were ‘very important’. These arrangements included physical
and mental illness, where to live, Wills, care costs, and funeral costs.
80
%
There may be many reasons for this, including:
70
%
60
%
50
%
40
%
30
%
20
%
0%
10
%
Importance of making
arrangements before the
issue arises (respondents
answering ‘very important’)
Women typically live longer than men9 so those in heterosexual
partnerships are likely to outlast their partners
Pl
Is ann
su in
e g
B
Pl
Is ann
su in
e g
A
While opportunities for work have expanded significantly for women in
the last three decades, they are often also responsible for the majority of
domestic activities, including family decision making (referred to as a ‘dualburden’)
Pl
Is ann
su in
e g
C
Women are less likely to have built up an occupational pension and are
therefore more vulnerable to economic decline if their male partner dies
before them10.
Pl
Is ann
su in
e g
E
Pl
Is ann
su in
e g
D
As a result, in old age the “… death of a partner is largely the experience
of older women, who are left living on their own with an economic legacy
shaped by opportunities, resources, decisions and actions over a long life
time” (Corden et al, 2008: 147)11. As a result, there is much scope to develop
planning related services for older women specifically.
Male
Female
Sources:
9
ONS
10 & 11
orden, A., Hirst, M. and Nice, K. (2008)
C
Financial Implications of death of a partner
(University of York: Social Policy Research Unit)
21
Death: someone else’s problem?
A key finding in our research suggested that people are highly dependent
on family and friends to carry out their wishes as they approach old age and
death. In many ways this is fitting and to be expected. The chart below shows
what action the respondents had taken. This highlights the dependency on
family and friends, with the exception of asset protection where there is a
clear evidence of Will writing.
A – Physical and Mental
incapacity
70
%
Five end of life planning issues
80
%
Actions taken by respondents to different end of life planning issues
E – Funeral costs
0%
10
%
20
%
30
%
See page 7 for a full description of
these five end of life planning issues.
50
%
D – Care costs
40
%
C – Protection of Assets (Wills)
60
%
B – Where cared for
Planning
Issue A
Planning
Issue B
Told a family member or friend
Written a document by myself
outlining my wishes
22
Planning
Issue C
Planning
Issue D
Had a legal document designed
expressing my wishes
Purchased a plan or service
Planning
Issue E
How do we see the journey to old age and death
Respondents reported that trust in external institutions and agencies
diminishes with age – this was expressed by those stating who they felt was a
trustworthy source of information or help in end of life matters. This loss of trust
is quite striking whether Charities, Financial services sector, Funeral Directors,
Government or even GPs!
A consistent theme in our survey is the high level of trust people place in
solicitors and this was evident across all of the age bands. Understandably,
the strongest bond of trust our respondents reported was towards family and
friends. However, this can result in reliance, which can be problematic as we
age. It has long been recognised that social networks decline as people get
older, yet as we age we place greater importance on and trust in family and
close friends.
Changes in the level of trust shown towards external institutions and
agencies by age
80
70
60
50
40
30
20
10
0
40-49
50-59
60-69
70+
Charity
Friend/family
Bank or Building Society
General Practitioner (GP)
Solicitor
Funeral Director
Insurance Company
Media, e.g. newspapers, television, radio
Government/local
government/local authority
23
A culture of
dependency in
old age can be a
significant barrier to
planning for death.
24
One result of this is that those relied upon by older people are increasingly
tasked with providing advice, guidance, support and care – often for free
and alongside employment and childcare responsibilities. This is likely to be
increasingly problematic as those whom older people rely on struggle with their
other responsibilities.
A further potential consequence is that older people are ‘infantilised’; in other
words they are encouraged to be reliant on others rather than being active and
making decisions for themselves. A culture of dependency in old age can be a
significant barrier to planning for death, as people assume that others will sort
it out for them. Indeed, 44% of respondents who had not planned for their own
funeral indicated that they had not so because they expected family and friends
to organise it.
How do we see the journey to old age and death
Can we count on traditional social networks in the future?
There are also other reasons for concern. At the same time as family and
friends are heavily relied upon there are changing trends in the makeup of
households, with more single occupancy, lone parent families and ‘blended
families’12. We can no longer assume therefore that people are living within
‘traditional’ family structures or that they can rely on family members who may
not be present and available to provide support in the future.
As a result, how we approach the end of life and planning for death needs to
take into account the decline of traditional social networks. Those providing
care, support and services for people as they plan for death, including
the funeral, need to be responsive to the ad hoc support systems that an
individual has in place, and not simply assume that the traditional ‘next of kin’
will be the principal provider of support or proxy decision maker.
Encouraging planning for the end of life beyond simply telling family and
friends will be increasingly important as traditional support networks change
in character and perhaps even decline in their ability to provide help.
It may also help to obviate another problem to which we referred above,
namely the infantilisation of older people. The irony here is that taking more
explicit responsibility for our final years and our death may turn out to be an
empowering experience.
Making sure that your affairs are in order before you die
can help provide you with peace of mind, and prevent further
unnecessary heartache for your loved ones after you are
gone.
Sarah Craven, Irwin Mitchell
Source:
12
ONS
25
Changes to The Total Cost of Dying
Taking control can be
empowering
The opportunity to
devote time and energy
to oneself in older age
can be regarded as
empowering.
None of us will go through life untouched by dying, death
and bereavement, which is why is it so important that we
have a more open approach to discussing end of life issues.
Talking about end of life issues and planning means all of
us can face the future with greater confidence and get our
house in order.
(Eve Richardson, Chief Executive of the National Council for
Palliative Care and the Dying Matters Coalition)
While the research supports some preconceptions about getting older, it also
indicates that we suffer misconceptions about ageing and planning for death.
Overall, our research showed that while people have concerns about ageing,
primarily related to health and fitness, there was a general feeling of looking
forward to old age in terms of changing priorities, less competition and having
more time to undertake activities other than paid employment. These positive
associations with ageing were more pronounced in older age bands, for example
81% of people aged 70 or above said not being competitive was an attraction in
old age. For the 40-49 age band, it was half this amount.
Somewhat contradicting the previous concerns identified in relation to
dependency, one aspect of this anticipation is the ability to take control of one’s
resources. The opportunity to devote time and energy to oneself in older age can
therefore be regarded as empowering. Taking control of what happens towards
the end of life can be part of this process.
26
Taking control can be empowering
What does taking control mean?
Taking control of one’s old age can mean different things to different people.
For those that had taken action to plan for the latter years of their life and
eventual death, 66% of respondents had identified what they wanted to happen
to their assets, for example in making a Will. 39% had identified who would
handle their affairs if they were unable to care for themselves due to illness.
Of those people that had made specific arrangements, in terms of organising
a funeral and who will pay for it, 26% of respondents had written it down in a
legal document and 23% had purchased a plan or service to cover the cost.
The propensity for people to purchase products or services is supported by
evidence elsewhere:
It has been estimated that with 564,000 funeral plans currently taken out,
over £1 billion has been invested in pre-need funeral plans by the general
public to date13.
The Legal Services Consumer Panel estimates that 1.8 million Wills are
prepared annually14.
Between April 2008 and July 2011 there have been a total of 330,000 lasting
power of attorney registered with the Office of the Public Guardian (OPG)15.
Who to talk to?
Overall, our research indicated that people are prepared to discuss death,
with talking to family and friends consistently being cited as one of the major
aspects of planning for the end of life. Yet we have already indicated that relying
on family and friends may be increasingly problematic in the future. A further
reason why this might be so is that family and friends may not be fully aware
of the technical and legal aspects of planning.
Interestingly, our respondents did not indicate a high level of resistance to
talking about planning for death with commercial organisations. 78% of
respondents felt it was acceptable for commercial organisations such as
banks, building societies, insurance companies and supermarkets to talk
to their customers about later life issues and to offer practical advice on
information and options available.
Source:
13
arland, S. (2010) ‘A fair deal for all’, Interview by
H
Louise Hoffman, Funeral Service Times, May: 18-19.
14
egal Services Consumer Panel, Regulating WillL
writing, July 2011
15
Office of the Public Guardian, July 2011
27
At the same time however, half of the respondents in the research indicated
that their trust in financial services had declined since 2008. Of those
respondents, 77% said that the recession had impacted on the trust in banks
and building societies; 66% said that they trusted insurance companies less.
Despite this erosion of trust, confidence in solicitors as sources of information
and guidance remains relatively high, with one in two respondents saying
that they trusted a solicitor’s advice. This finding is echoed by a recent report
by the Legal Services Consumer Panel17. The implications of a high level
of trust in solicitors will become more apparent as the Legal Services Act
2007 is implemented and new legal practices (Legal Disciplinary Practices)
are introduced to the market. Nonetheless, policymakers and commercial
organisations alike should consider how to respond to and utilise these
existing trusted networks.
The question as to who should be providing guidance,
advice and support has perhaps a more complex answer
than the simplicity of the question.
Bill Stewart, The Will Writing Company
Over half of our
respondents felt that
either central or local
government should
pay for care at the
end of life.
Who should foot the bill for old age and death?
Planning and talking is one set of issues around old age and death. Paying for it is
another! The issue of who is responsible for paying for death is a contentious one,
particularly at a time when public services are being cut. Despite Andrew Dilnot’s
assertion that most people are happy to contribute towards the cost of their long
term care, our research suggests that the perception remains that the State should
provide even though we are living through times of austerity and a narrowing of the
welfare state safety net. Over half of our respondents felt that either central or local
government should pay for care at the end of life. There is an acknowledgement
however that the individual has a responsibility, although only 15% think this
should amount to the sale of their personal assets including their home.
Most people are happy to contribute towards the cost of
their long-term care, but they want a simpler system which
gives them greater certainty over what the State will provide
and what their responsibilities will be.
Andrew Dilnot, 18 May 2011
Source:
17
28
egal Services Consumer Panel, Regulating
L
Will Writing, July 2011
Taking control can be empowering
Our research
showed that over a
quarter (26%) of our
respondents had
not undertaken any
planning for later life
arrangements.
m T
y h
th as e s
an se al
m ts, e o
y o f
ho th
m er
e
m T
y h
as e
s
s
m ets ale
y , i of
ho nc a
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e din
g
fa M
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, m
ch e.g ed
ild . p ia
re ar te
n tn
er
,
Ch
ar
ity
pa
y
Is
ho
ul
d
au Loc
th al
or
ity
go Ce
ve nt
rn ral
m
en
t
0%
10
%
20
%
30
%
40
%
50
%
60
%
Who should pay or contribute towards any care required at the end of
your life?
However, while respondents’ opinion was that the State should provide, in
reality only 5% expected that the State would provide when asked why they
have not made an arrangement for how care would be paid for.
With a low expectation of State support we could anticipate that individuals
would make provision for their own older age. So while there is a clear disparity
between what people think should happen versus what they think will actually
happen, our research showed that across all of the issues presented over a
quarter (26%) of our respondents had not undertaken any planning for later
life arrangements. We already know that the costs of dying are increasing
and this coupled with the ageing UK population means that these issues can
only become more problematic. So why might people not be making any
arrangements?
29
The basis for a plan
The evidence presented in this research indicates three key
points: costs at the end of life are rising; family and friends
are often relied upon to make decisions and carry out wishes,
including meeting costs; and many people do not plan
sufficiently for old age. All these point to a need for more
coherent planning in order to relieve the burden on others and
organise resources as efficiently as possible.
My father left us a wonderful gift. His desire to make sure
he had a Financial “Plan B” in place is a legacy that truly
underscores the love he had for his family.
Quote from How Dad’s Planning Helped Us Cope With His Death;
By: Sharon Epperson, Correspondent for CNBC
Socio-demographics and planning
One objective of our research this year was to establish what difference
affluence made to people’s propensity to plan and whether there was an
autonomous planning variable that influenced behaviour: in other words, are
some people just good planners regardless of how much they have to gain or
lose by approaching their old age well prepared?
30
The basis for a plan
The effect of affluence on planning
We grouped and analysed the respondents of the survey into four segments
based on their affluence (socio demographic A, B & C1 versus C2, D & E) and
whether they were planners or not planners – which was determined by their
responses to a number of the questions in the survey.
Below we outline the general characteristics of the four groups to emerge:
Organised wealth
(affluent planners)
Misplaced trust
(less affluent planners)
Predictably the best placed category, this
group are affluent, have thought ahead and
made the effort to plan – more likely than
not with traditional service providers (i.e a
solicitor) and least likely to buy a funeral
plan in advance (although likely to leave
instructions in a Will).
Perhaps the most interesting category in the
sense that this group, more than any other,
is worried about and has considered the
issues that might face them in old age. They
recognise that they are unlikely to be able to
spend their way out of trouble.
As they have planned they understandably
look forward to older age more than the less
affluent. They are more ambitious about what
they might be doing as they get older and
perhaps the only thing to worry them in their
twilight years is the risk to their health.
They consider themselves planners and have
done something about these issues – but
that action often turns out simply to be to tell
their family and friends. Further, where they
have said they have not made any plans they
overwhelmingly expect friends and family to
sort things out.
Therefore they and their next of kin may be
exposed to “The State will decide” when the
time comes.
Lazy affluence
(affluent non planners)
Unengaged underserved
(less affluent non planners)
With affluence but little planning arguably
this category has most at risk. At a
superficial level this group are least likely
to have thought about their dotage, in
particular how they would celebrate your
90th or 100th birthday. More worryingly
they have not thought about some of the
key issues such as where they would live if
unable to look after themselves, and how
this would be paid for.
This category are least likely to be worried
about the issues presented. They have
thought least about them probably because
they feel they are unable to do something
about the situation and therefore as a
consequence, the most likely to be
dependent on the State.
This groups trust has been hardest hit
than any other by the economic crisis,
suggesting that there is an awareness that
when things go bad they become more
aware of the risk to their wellbeing.
We suspect that their lack of trust is a
symptom of the “cruel hand life has dealt
them”. This group are the least trusting of
commercial organisations and typically need
to be “told to do something” (often by a friend
or family member).
31
B – Where cared for
C – Protection of Assets (Wills)
D – Care costs
70
%
60
%
A – Physical and Mental
incapacity
50
%
Five end of life planning issues
80
%
Have you made any arrangements?
0%
10
%
20
%
See page 7 for a full description of
these five end of life planning issues.
30
%
40
%
E – Funeral costs
Planning
Issue A
Planning
Issue B
Planning
Issue C
Affluent planners
Less affluent planners
Affluent non plannners
Less affluent non planners
Planning
Issue D
Planning
Issue E
Have not yet
planned anything
Overall, our research showed that 66% of respondents had planned for what
will happen to their financial assets and belongings after they have died (for
example, a Will). This number increased to 76% for ‘Organised Wealth’. This
group had consistently higher results for ‘written a legal document’ when
asked what preparations they had put into place for the different planning
issues. They were also more trusting of commercial organisations.
‘Misplaced Trust’ interestingly had the largest propensity to plan. This group
have considered addressing care in the event of physical and mental illness
issues, where to live, Wills, care costs, and funeral costs. However, they were
also less trusting of commercial organisations. If organisations can overcome
this suspicion and tap into their circle of trust, there would be an opportunity
to help them take proactive and more robust control of their future. Currently,
they display an over reliance on friends and family that could be placing a
burden on the very same people they are trying to protect. Although not
dramatically overrepresented this group is more likely to contain older women
than the other groups.
32
The basis for a plan
‘Lazy Affluence’ are less likely to be confident than those in our ‘planning’
groups in making decisions, and therefore to have made other arrangements
for their old age, such as mental and physical illness issues. If they were
unable to make decisions about their own affairs whether due to physical or
mental incapacity a drawn out and expensive legal process is required if a
legal document (Lasting Power of Attorney) is not already in place. Their lack
of planning could therefore mean this group are in the position to lose out the
most financially. 60% of this group say the adverse economic events of the
last few years have impacted on their trust in organisations as sources to help
prepare for older age issues (the other categories only registering 44%-48%).
Based on our findings, the ‘Unengaged Underserved’ are more likely to be
a burden on their friends, families and the State. When asked throughout the
survey about the different issues in old age, including where to live and what
will happen to their financial assets, they were the least likely to be concerned.
However, where they have made an arrangement they were most likely to have
done so because a friend or family member had told them to. As a result, we
question here if there is an opportunity for the State, commercial organisations
and the voluntary sector to work together, or a case to be made to encourage
non traditional providers to offer services to enable people in this category to
get into better shape when it comes to planning for older age.
33
In terms of
barriers, there was
considerable variation
across age groups as
to why arrangements
were not in place.
Barriers to planning
Triggers for planning have already been identified in this report, principally around
the idea that there is an ‘appropriate age’ to plan. This sense of an appropriate
age is connected to various life events including marriage and divorce, inheriting
or losing money, and the death of a parent.
In terms of barriers, however, there was considerable variation across age
groups as to why arrangements were not in place. For those aged over 60
family and friends were again an issue, with expectations that they will make
the appropriate arrangements for the five issues. In the 70 plus age band this
ranged from 33% of respondents suggesting that family and friends would put
in place arrangements for financial assets and personal belongings, up to 64%
suggesting they would pay for their funeral.
In the 40-50 age band there was a sense of leaving it until later in life because
of both their financial situation and their age. When asked why they have not
arranged how their funeral will be paid for, 22% stated they would plan this when
they had more money and therefore more options. When asked why they had
not arranged where they will live and be cared for if they were unable to look
after themselves, 21% said they were too young; in their eyes they did not need
to do this yet.
There was one universal barrier for our respondents regardless of age. There
was a consistent response across all of the age bands for all of the issues
presented that they simply did not yet know what they want to happen.
34
The basis for a plan
Informed forward
planning in preparation
for old age may
positively impact on
those who are most
vulnerable.
Those that cannot plan
There remains a group of people who either lack resources entirely or have no
need to plan because they do not have sufficient wealth or assets to warrant it.
In the case of funerals, evidence from the Department of Work and Pensions’
administer the Social Fund Funeral Payments Scheme, suggests there
is a sizeable number of people for whom meeting the cost of a funeral is
impossible. Within this scheme, 38,000 awards were made from 69,000
applications in 2010/11, worth £46.2 million in total18 and averaging around
£1,200 per applicant (£700 for funeral costs + burial/cremation fees). If using
the 560,000 UK deaths per year average the number of people applying to the
Funeral Payments Scheme thus equates to around 7% of all deaths.
Not only is this figure quite startling, 44% of applicants to the Scheme were
unsuccessful19. Furthermore, for those that are successful in their application,
there is a shortfall in State support for people from low income backgrounds
when it comes to funding a funeral. How individuals meet this shortfall was
explored in last year’s report with individuals suggesting a range of alternative
solutions ranging from taking from savings, borrowing from friends and family
to selling possessions. As stated earlier the costs of dying are increasing,
this coupled with the ageing UK population means that these issues can only
become more problematic.
As a result, family breakdowns, lack of income and health and social care
costs mean that old age is a potentially vulnerable time of life for many.
Informed forward planning in preparation for old age may positively impact
on those who are most vulnerable. While there is an expectation that the
State will act as a safety net for people in this position, this is not always the
case. There is much opportunity for commercial organisations and trusted
networks to ‘plug the gap’ in offering a range of services, guidance and advice
tailored to specific groups of people, such as women or those people who
have limited resources. Our research suggests that there is little resistance
to commercial organisations taking on an advisory role. This role, however,
needs to be appropriate and tailored towards groups of people identified,
based on their affluence and attitude towards planning.
Sources:
18 & 19
WP Annual Report by the Secretary of State for
D
Work and Pensions on the Social Fund 2010/11
35
Conclusion
The costs associated with ageing are frightening. We face
an End of Life Time Bomb in the next two decades as the
number of deaths rises, by over 80,000 people a year in
England and Wales alone. The extent to which services are
in place to support those people at the end of their lives, and
those bereaved after their death, is debatable.
At the same time, the cost of dying is rising above the rate of inflation. The
cost of dying in 2011 is £7,248. This is £436 more than 2010, and the highest
figure since our annual research began. This figure incorporates a 61%
increase in funeral costs over the past 7 years.
There are confused and contradictory messages about the extent to which
individuals rely on family and friends when it comes to planning for death. On the
one hand, family and friends are looked to for advice, guidance, and information.
In many cases it is also assumed that they will organise and fund a funeral.
While this is a testament to the strength of relationships within the UK, we
see significant causes for concern. With changes in households and family
structure, and the decline of traditional social networks associated with ageing,
many older people are at risk of isolation and poverty. Subsequently, the
opportunity to discuss options and inform others about wishes may be limited.
Furthermore, we argue that a reliance on family and friends can actually be
a barrier to planning. Fostering a culture of dependency, this can lead to the
infantilisation of older people and an unsustainable sense of responsibility and
burden on others.
For more information, contact Simon Cox, Head of
Life Planning at Sun Life Direct on 07977 917 482
or Paul Riddell, Head of PR and Communications at
AXA UK on 01256 798442
36
Conclusion
A reliance on family
and friends can
actually be a barrier
to planning for the
end of life.
Taking control of one’s latter years can therefore be an empowering and
liberating experience, for both the individual and those around them.
Formalising this through organised and informed decision making, clearly
articulating wishes and ensuring that sufficient funds are available to cover the
cost of dying would provide both the planner and their networks with peace of
mind.
Our research has shown that there is limited resistance to the input of
commercial services when it comes to planning, although this does depend on
an individual’s affluence and attitude towards planning. Trust in financial services
has declined since the recession, but there is evidence that established legal
services are highly regarded. Bearing this in mind, commercial organisations
should be both leading the way in, and being looked to for, encouraging
people to plan for their ageing and death. Our respondents indicated a general
willingness to talk about death and this could be capitalised on. In other words,
we should not shy away from death.
Finally, there is much scope to examine the relationship between commercial
organisations, the State and the voluntary sector in planning for death. At a
time when public sector funding is extremely tight, opportunities to collaborate
may be more important than ever. Certainly, the 100,000 people who struggle
to pay for the cost of a funeral (probably including the 69,000 who apply to the
Social Fund Funeral Payments Scheme) could benefit from further insight and
innovation into how people from lower income backgrounds can meet the costs
associated with dying via support, advice and guidance from the three sectors.
37
About the authors
Kate Woodthorpe
Dr Kate Woodthorpe is a lecturer in Sociology at the Centre for Death and
Society (CDAS), the University of Bath. CDAS is the UK’s only centre devoted
to the study and research of social aspects of death, dying and bereavement.
Through her research Kate has worked extensively with funeral and cemetery
associations examining the provision of services for people who are dying and
bereaved.
Kate has published widely on the cost of death, the material culture of death,
and the experience of bereavement. Her research has been featured in the
Guardian and the Telegraph, and she has spoken about her field of expertise
on Radio 4’s ‘Thinking Allowed’ and ‘Today’ programme, as well as numerous
local radio stations. She has appeared on BBC Breakfast and acted as an
academic consultant on two Open University/BBC programmes, Two Feet in
the Grave (BBC 1) and The Art of Dying (BBC 4).
Kate’s current research is funded by the British Academy and examines the
provision of mortuary services. She is also investigating the status of funeral
directors, including issues surrounding the trade’s educational requirements
and regulation.
Bob Tyrrell
Bob is an independent consultant who specialises in analysing the nature and
direction of social change. He works with business and public policymakers
on the strategic implications of social change. As well as Sun Life Direct,
amongst his other recent clients are Tesco, Bupa, O2, Milligan Retail, Cadbury
and Heinz.
He was formerly Chairman and Chief Executive of the Henley Centre for
Forecasting. He established the Centre as an independent private company
in 1985 and after building it up to become one of Europe’s foremost strategic
planning consultancies, he sold the company to WPP.
He has served as Chairman of the think tank Demos, been a Visiting Professor
at the City University Business School, an advisor to the Conservative Party
and a member of the Conservative Policy Forum. He also works in the field
of journalism and broadcasting with articles published in the Sunday Times,
a programme in Channel 4’s ‘Opinions’ series and programmes presented
for the Radio 4 Analysis programme. The subjects covered include the future
of Europe, the cultural implications of the ageing society, the impact of
competition on the health service and the nature of consumerism.
38
Simon Cox
In 2007 Simon commissioned the first ‘Cost of Dying’ survey as a means of
identifying the extent of end of life costs faced by consumers.
Simon has worked within the life assurance industry for 25 years. He was
instrumental in the introduction and innovation of funeral-linked life assurance
plans, a regular contributor to Mintel’s Life Protection reports, and his input
highly influential in Mintel’s decision to publish for the first time a standalone
report on the whole-of-life sector, with particular emphasis on the links
between the over-50s market and funeral plans.
Simon sits on the Money Advice Service Bereavement Advisory Group,
Bereavement Advice Centres policy steering group and works with the
Dying Matters coalition to promote greater debate about death, dying and
bereavement.
The trouble
with dying
The Sun Life Direct Cost of Dying Survey 2011
39
Sun Life Direct, PO Box 1810, Bristol BS99 5SN
www.sunlifedirect.co.uk