By Barry Floyd, who is the Managing Director of Golden Leaves Funeral Planning
The world has been talking about the Covid-19 pandemic, and the effects of it since March 2020. Eight months on, the predicted second spike is now a reality, and the death rate is still on the increase. As a nation, we are not renowned for talking openly about our demise and subsequently, the planning of it, but as the subject of death has become a daily news item, are people starting to think differently about later life planning?
What do people actually plan for?
For the majority of the over 50’s, the inevitable subjects of life insurance, will writing and funeral planning become more prevalent but are relatively undersubscribed. However, taking the time to commit to any of these, significantly reduces any cost burden on your loved ones, and it therefore makes sense to consider your later life plans.
Of course it is natural for us to want to avoid the concept of ‘the end of our life’ and for many, we will only purchase a funeral plan or a will when we are either struck down with grief following the loss of a loved one, or because we are going through life changes.
Panic buying a funeral
There has sadly, yet inevitably, been an unprecedented increase in demand for funerals over the last eight months, and whilst the country was up in arms earlier this year due to the panic buying of essential supplies, innumerable people were also having to ‘panic buy’ a funeral. These consumers were those who needed to buy an ‘At-Need’ funeral, where all the arrangements are made and paid for at the time of death, rather than a funeral plan where all the costs have already been paid in advance.
The majority of those who were buying “at-need” were most likely to have been at their most vulnerable emotionally and many of these consumers would also have been financially vulnerable as there would have been no planning and saving for this eventuality and maybe no available funds, which means that the individual arranging and paying for the funeral is usually left staring down the barrel of taking on considerable debt to fund the service.
These consumers have not been able to shop around or have the luxury of time to be able to think clearly about the purchase they are making. People buying a funeral after a shock or sudden death in the family are, overall, too emotionally weak to truly assess the best deal for the funeral they now find themselves organising. They are under a great deal of stress to buy and it is highly unlikely they will rationally compare prices or providers, typically choosing the business located closest to them geographically. Additionally, many of them no longer live in the same area as the deceased and have consequently lost all local knowledge of which local business services to commission.
Why don’t more people buy a funeral plan?
Pre-Covid, funeral plans were not generally seen as a ‘distress’ purchase and for the majority, were pushed aside as an avoidance to facing a stark and unpleasant reality. For many, this will still be the case, but has the pandemic changed the triggers that prompt people to think about the security and value of the funeral plan product?
Consumers will of course have reservations about buying a funeral plan. This may be a combination of them feeling both overwhelmed with the variety of products available and/or their opinion of the industry, which has likely been tainted by negative press stories in circulation. The funeral world is constantly under the spotlight for what was deemed to be the systematic overcharging of consumers, and the nature and frequency of these stories will undoubtedly leave an element of lasting mistrust. The purchase of a funeral plan provides the perfect solution to this concern, as it protects the consumer’s next of kin against expensive funeral costs, so there are no nasty financial surprises at the end.
UK unemployment set to soar
While the pandemic may have forced more of our over fifties to consider their mortality, and consequently the value of planning their funeral in advance, it certainly hasn’t assisted in their ability to fund their potential purchase. By December 2020, the unemployment rate in the UK is predicted to exceed 3.5 million. Most of this statistic will be looking to find money from every available source and may cause them to cash in what they can. This may result in those who have already taken out funeral plans, or any other plan or policies they have bought in to, to cancel so as to release cash and reduce monthly expenditure. Although understandable in the short term, this will, by no fault of their own, leave them and their loved ones in a vulnerable position later in life.
The majority of people who buy funeral plans are in the 60-80-year age group. Individuals over the age of 60 will almost certainly find it difficult to secure new employment if they face redundancy which means that the fallout from Covid may well force this group into a financial resilience problem.
A new dilemma
This pandemic, therefore, may be the paradox that manifests itself as the catalyst for a fundamental shift in attitudes towards funeral planning. It could make people realise that there is clear sense and prudency in putting plans in place to minimise the stress and financial impact for loved ones after their own demise. Or will the economic uncertainty caused by the pandemic, mean that people will protect the cash they have and shelve later life planning until the economy, and their own situation, has stabilised? With the pandemic illustrating the fragility of life, the former is probably the most sensible approach.
Either way, the devastating effects of Covid-19 have highlighted that if individuals have the resources, it really does make sense to re-think your later life plans more than ever before so that you are removing a financial burden from your family and next of kin. The alternative will potentially leave them in a very uncomfortable financial position when having to pay for your funeral service.