10-05-2025
How death of a loved one could leave you in crippling debt – and how to avoid it
DEALING with the loss of a loved one could hit your finances.
A third of people saw their financial situation worsen, according to data from charity Sue Ryder.
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As the Financial Conduct Authority renews calls for banks and other companies to do more to support vulnerable bereaved customers, here is the help available for those dealing with grief.
When Yvonne Bailey's husband John passed away unexpectedly from cancer, just ten weeks after her son Peter had died in a road accident, her world was shattered.
Her grief was overwhelming, but she also had to deal with money worries on top.
Without John's salary as a delivery driver, Yvonne had no money coming in and her own grief made it impossible to work.
"John and I had always made just enough money to get by. We paid our bills on time but had no savings and no life insurance.
"When he died, his income disappeared overnight."
The benefits Yvonne, from Witney, Oxfordshire, received as a widow were not enough to live on and she began to miss rent payments and other bills.
After a year, still grieving, she was forced to go back to work.
Now 79, Yvonne still feels the financial impact of John's death.
Though she receives his state pension as well as Pension Credit, she still has to budget very carefully.
Yvonne is not alone.
Joanna Elson, boss of the charity Independent Age, says: 'The death of a partner can be an extremely traumatic event, not just emotionally, but there can also be devastating financial implications - this is especially true when it is sudden or unexpected.'
The charity has supported people who were unable to pay their mortgage or turn on the heating because their income fell so drastically.
Joanna says: 'Bereavement can be a trigger for poverty in later life, and this shouldn't be the case.'
No matter what age you are, losing someone close to you can put you at risk of money problems.
While some people will be able to fall back on life insurance or death in service cover from work, others will have no safety net.
Research by Sunlife found that a quarter of adults say they aren't sure they could cope financially if someone close to them died and two in five in a relationship reckon they wouldn't have enough money to support themselves if their other half died unexpectedly.
Lilly Aaron, from the Money and Pensions Service (MaPS), says: 'A bereavement may lead to a loss of income to your household, as well as a shift in financial responsibilities.
'You have to keep up with essential bills, which is hard in the midst of grief, and you may also be more susceptible to things like scams.'
Sadly, fraudsters are known to use a death as an opportunity to pounce, knowing families will be vulnerable and may not think things through as carefully as they would in normal times.
They may even claim they are owed money by the person who died, or say you're entitled to a large sum of money but that you need to pay to access the cash.
STOP DEATH TURNING INTO DEBT
Money may not be the first thing on your mind if you've lost someone close to you, but when you are ready, there is a lot to sort out.
You need to inform people that someone has died and make sure you don't carry on paying for things like their subscriptions that you no longer need.
The Government's "Tell Us Once" service allows you to report a death to most Government organisations all in one go (Bereavement Service in Northern Ireland).
You can use the websites Settld or LifeLedger to contact utility companies, banks, pension providers, insurance firms, and TV and broadband providers.
Lilly says: 'If you're at risk of missing a payment or in financial difficulty, head to the advice locator at to find free debt advisors local to you.'
Take steps now
The thing that can make the biggest difference is being prepared. One in ten adults in a relationship admit to not having put anything in place to ease the financial strain on their partner in the case of their death.
Just talking about what would happen if one of you died is a good start.
Making a will ensures your wishes are recorded. Research DIY will kits to save on legal fees.
Fewer than one in four save enough to cover the full expense of a funeral, which can forced loved ones to take out expensive credit.
Only 29% have some kind of life insurance cover, found SunLife. The kind of policy you need will depend on things like your age, employment and whether you have a mortgage.
The Money Helper website can also help you check how to transfer bills to your name and what benefits could get.
Lilly says: 'You may be entitled to a higher level or you may qualify for the first time now that your partner's income isn't being taken into account.'
There are specific payments that can help, like Bereavement Support pPayments, Funeral Expenses Payment (Funeral Support Payment in Scotland) and, following the death of a child or stillborn baby, the Children's Funeral Fund.
Those who are struggling financially may also be eligible for hardship funds from their local council and, if you are now living alone, you can get a 25% reduction on council tax.
Find out if you might qualify for a one-off grant at
Lilly says: 'It is a really difficult time following someone's death and dealing with the admin and finance while grieving can just feel really overwhelming.
'I really encourage people to visit to help people stay on top of things a such a difficult and confusing time.'
The charity Cruse Bereavement Care ( gives emotional and practical support.
'I wish we'd had life insurance'
After her husband died, Cherieda Maw was left with around £10,000 credit card bills and loans to pay – but no money to pay them.
When husband Malvin was alive, they didn't miss a repayment, but after he died in February 2014, the bills in Cherieda's name fell solely to her.
Living on income support, she couldn't make ends meet.
'Every day I'd get letters and phone calls, but I'd tell them I had no money.
'They chased me for years, but I didn't know what to do about it.
'How could I grieve, when I had so much to sort out?'
While mourning Alvin, she also felt some anger.
'He didn't believe in life insurance, but it would have helped me a lot – I could have paid everything off.'
Eventually, with her debts now over £30,000, she desperately searched for help online, and found the free debt help organisation
Its advisors helped her get a Debt Relief Order, writing off her debts a year later.
'It was a huge weight off my shoulders when the letters and calls finally stopped.'
