Financial considerations following a bereavement
Assessing your own financial affairs after the death of a loved one
Turning to the future
When someone close to you dies, it can focus your mind on your own financial affairs, or change your situation so significantly that you need to update your plans. As you begin to come to terms with a bereavement and start to think about the future, you may wish to consider the following issues.
Making a will
Dealing with the affairs of a loved one who has died emphasises how important it is for family and friends that there is a valid will. If you have not already made your own will, you may decide now is the time to do so. Or you may need to update an existing will, particularly if you have lost a partner or child. For more guidance, you can contact your solicitor or a special will writing service.
Dealing with the affairs of a loved one who has died emphasises how important it is for family and friends that there is a valid will
Reducing the effect of Inheritance Tax
Inheritance Tax means the tax authorities can take a big slice of your estate when you die, unless you have planned carefully. Inheritance Tax is due on estates valued above £325,000, at a rate of 40% on the amount over this threshold. To find out more about Inheritance Tax, visit HM Revenue and Customs.
Will your pension be enough
If you have lost your partner, you may wish to review your personal pension arrangements to check whether your retirement plans are still viable, or whether you need to increase your contributions. You can do this by consulting your pension provider.
Protecting what's important
It's a good idea to check your insurance policies to make sure they are right for your new circumstances. If you had life cover jointly with your deceased spouse or civil partner, talk to your provider about adjusting the cover, or shop around for a new policy.
If the death has left you as the main breadwinner, you may also decide to take out extra insurance such as critical illness cover or income protection cover. These products help provide financial peace of mind if you are unable to work due to illness or injury.
You may be entitled to bereavement benefits
If the death of a partner means you have lost your main household income, you may be entitled to financial help from the state. In England and Wales, bereavement benefits are paid by the Department for Work and Pensions to widows and widowers or to a surviving civil partner.
Bereavement benefits that you may be entitled to include:
- Bereavement Payment – a one-off lump sum you claim when your spouse or civil partner dies
- Widowed Parent's Allowance – if you have dependent children
- Bereavement Allowance – if you don't have dependent children
Find out more at the Government website or read the Department for Work and Pensions guide Support after a death, practical help when someone dies. You can download this at www.dwp.gov.uk or get a copy from your local register office or Jobcentre Plus.
Coping with debt
When someone dies with debts, it can create enormous pressure on those left behind.
Any outstanding debts, such as loans or credit cards, will have to be paid off using the money in the estate - unless they held repayment protection insurance.
If paying off the debts of a deceased relative has left you with money worries, talk to your bank for advice and support. You can also get help from a Citizens Advice Bureau - search for your local branch at www.citizensadvice.org.uk. Or the Debt Advice Foundation has a free helpline: 0800 043 40 50.
Lines are open 8:30am to 6pm, Monday to Friday and Saturdays 9am to 2pm (excluding public holidays).
Letting us know
Notify us online
You can inform us of a bereavement online.
Visit us in branch
Write to us
You can send documents to:
HSBC Bereavement Services
51 Saffron Road