Rising funeral costs are increasing pressure on life insurance and funeral planning arrangements, with new data showing many UK families remain underinsured when it comes to end-of-life expenses.
According to SunLife's 2026 Cost of Dying Report, the average cost of a simple attended funeral has risen to £3,828, while the total cost including a send-off - covering items such as catering, memorials and venue hire - now stands at £5,140. Despite this, fewer than half of the people who make financial provisions for their funeral save enough to cover the full cost, leaving families to bridge the shortfall.
Around 70% of people rely on some form of provision, including savings, funeral plans or life insurance, but only 42% have adequate funds in place. As a result, one in seven families report experiencing financial hardship when paying for a funeral, needing to find an additional £2,365 on average. Nearly one in five say the cost directly affected their standard of living, the report said.
Where insurance comes in
The findings underline the role life insurance and funeral planning products play in protecting families from financial stress at a vulnerable time. Where no or insufficient cover is in place, families are increasingly turning to last-resort measures, with 12% using crowdfunding and 8% borrowing from unregulated lenders to cover funeral costs.
Cost pressures are also influencing funeral choices, with more families opting for lower-cost options. The simple attended funeral has overtaken traditional services as the most common choice, while direct cremations now account for around one in five funerals. Although direct cremation is the most affordable option at £1,628, most families still hold a separate memorial or celebration of life, bringing total costs closer to £3,000.
The report also pointed to the value of pre-planning, which has direct implications for insurers and advisers. Families who were aware of a deceased person's funeral wishes spent £335 less on average, suggesting clearer planning and appropriate cover can help reduce unexpected costs.
Price of death
Regional pricing differences further complicate the adequacy of insurance cover. London remains the most expensive location for a simple attended funeral at £4,897, compared with £3,105 in Northern Ireland. These variations increase the risk that fixed-sum life policies or funeral plans may fall short if not reviewed regularly.
Mark Screeton, CEO of SunLife, said the data showed funeral costs continue to rise faster than many families anticipate, reinforcing the importance of planning ahead. He noted that more people are turning to simple attended funerals.
"Having conversations about how both what we want for our funerals and how they will be paid for can make a real difference, emotionally and financially," he said. "Planning ahead means families can create a meaningful farewell without unnecessary stress or cost at an already difficult time."
