New data reveals that London residents face the UK’s highest end-of-life costs, with combined funeral expenses and inheritance tax liabilities averaging over £286,000 per estate.
Around £8.3bn is expected to be claimed in inheritance tax in 2025, a figure that’s increasing year-on-year. From the beginning of April 2027 estates that fall into the £325,000 inheritance tax threshold will be expected to pay a 40% tax.
With this in mind, pensions advisors Almond Financial created The Cost of Dying with IHT report and analysed the inheritance tax data by the Office for National Statistics (ONS), and funeral cost data to reveal the true cost of dying for estates liable to IHT in the UK.
The average cost of a funeral in the UK stands at approximately £9,729, including the funeral itself, professional fees, and additional (optional) send-off costs, such as flowers, catering, venue hire and a memorial.
London was revealed to have the highest average inheritance tax, standing at £275,330 to pay up after a loved one’s death – bringing the average cost of dying up to £286,592 including funeral fees.
This financial burden comes at an already emotionally challenging time, with London funerals costing an average of £10,962 – the highest in the UK.
All the southern regions – including the South East and the South West – were revealed as having among the highest average inheritance tax bills for liable estates from 2021-2022, demanding over £210,000 to grant probate.
With funeral fees, this brings liable estates in southern regions into the top five for the true cost of dying.
Estates in the North, West and East Midlands rank towards the lower end of the table and face slightly lower costs averaging between £175,000 to £189,000.
Average cost of dying for estates liable to IHT, by region
| Region | Total average cost of a funeral & send off | Average IHT liability by estate | Total average cost of a dying by estate (funeral + IHT) |
| London | £10,962 | £275,330 | £286,592 |
| South East | £10,456 | £242,321 | £253,077 |
| UK | £9,729 | £215,000 | £225,029 |
| East | £10,456 | £204,811 | £215,567 |
| South West | £9,479 | £203,846 | £213,625 |
| East Midlands | £9,746 | £179,389 | £189,435 |
| North West | £9,810 | £170,526 | £180,636 |
| West Midlands | £9,746 | £165,680 | £175,726 |
| North East | £9,560 | £148,760 | £158,620 |
| Wales | £9,607 | £141,583 | £151,490 |
Commenting on the research, principal financial advisor, Sam Robinson at Almond Financial said:
“Planning a funeral of a loved one is already a sensitive time, the last thing you need is extensive admin or financial stress. Through proper planning, you may be able to avoid this and make the process a lot easier.
“If you think you’re going to be within the new IHT threshold, it’s important to look at ways of reducing it before it gets to this stage. Consider setting up life insurance that can cover IHT liability for your loved ones, ensuring they receive the full value of your inheritance without the big tax bill. Another option is gifting assets to spouses as they are IHT-free or potentially gifting money to loved ones as the financial transfers are exempt from the estate.
“Inheritance tax can be confusing and knowing where to begin planning your assets might not always be straightforward. Speaking to a financial advisor can help you plan for the future, leaving you and your loved ones in the best financial position.”
For more information, please visit: almondfinancial.co.uk
