January could be the death of you - and your family's finances

January sees more deaths than any other month, as the result of a combination of the cold (which increases deaths from heart disease), January blues, post-Christmas stress and an odd phenomenon that sees people 'holding on' for the New Year. Unfortunately for the family who loses a loved one, January is also the month when they can least afford to pay for the funeral.

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There were more than 47,000 deaths in the first four weeks of January last year. That's 17% more than any other month that year. And the higher death rate wasn't just a 2016 phenomenon - there are always more deaths in January.

As a result, thousands of people were left to deal with the shocking cost of the funeral.

Expensive funerals

The average funeral now costs £5,873, so overall we will spend around £278 million on funerals this January. Unfortunately, most people still leave no financial provision for their own funeral - or not enough. It means the average family is left with a bill of £1,900, and at this time of year this is especially challenging.

Graham Jones, Commercial Director at SunLife said: "Funerals are one of the fastest rising fixed costs in the UK and in the past year alone have risen 5.5% which is more than double the rate of pensions, inflation and earnings growth. While most people are making at least some provision, almost half of us leaving either nothing or not enough leaving family and friends with a funeral bill of almost £2k on average. It can cause loved ones a great deal of added stress at a difficult time."

With six weeks between paydays, most people are struggling to get to the end of January with their finances intact, so it comes as another nasty blow that they need to track down almost £2,000 in funeral costs.

For one in seven, this causes real financial problems. Within this group, one in five had to borrow money from friends or family, one in ten had to get a loan, one in ten sold belongings to raise the money, and a quarter of them put it on a credit card.

Make plans

It goes to show how important it is to make plans for your funeral. It's worth starting out by calculating roughly how much you need to leave for the funeral. SunLife has a handy calculator, which will take into account your location and the kind of funeral you want in order to establish the likely cost.

It's also important to make a note of the kind of funeral you want, and have a conversation with those around you. This is especially the case if you don't want a fancy and expensive send-off. Many people will feel they ought to spend as much as possible, so they don't let their loved one down. So if you want them to save their money, it's best to tell them.

Next consider the most appropriate way to leave cash to cover the cost. There are several approaches worth considering. Some 56% of people who make plans for the event will leave savings and investments, to cover the cost. It's perfectly possible for the family to access this cash with the help of the executor of the will, to pay the bills.

Another 28% have a pre-paid funeral plan in place, 16% have life insurance, and 14% have an 'over 50s plan'. All these approaches have their pros and cons, so it's worth thinking them through carefully to ensure you understand exactly how much you will end up putting into a plan, and what you can expect to get back - as well as whether the lump sum you get will cover the cost of the funeral you want, and what will happen if something goes wrong - such as the funeral director going out of business.

If you have put aside money to pay for the funeral, don't forget to tell your family about this too. There's no central directory for people to check if you have a plan, so you need to make a specific note of any scheme you are a member of.

Nobody wants to think about planning their own funeral - or paying for it. However, it's far better for you to consider it now, than leaving your loved ones with a £2,000 bill and weeks to wait for payday - at what is already a deeply traumatic time for them.