Thousands forced to borrow from illegal loan sharks to pay for funeral costs

Desperate families are finding themselves forced to borrow from illegal loan sharks as a consequence of getting into severe debt due to the high costs of paying for the funerals of loved ones, according to research by Funeralexperts.com.

The data revealed that around 32,400 people (3%) of the 1.08 million people who were forced to borrow from loan sharks did so to pay for funeral and health-related costs. This rises to 43,200 (4%) in the first six months of 2025 alone.

The data found that some people were being billed up to £1,550 more than the cheapest provider. The most expensive brand was £742 more than the market average. The research also found many big brands charging much more than independent funeral directors in local communities.

The analysis found that of the people who had borrowed from loan sharks, over nine in ten (91%) did not have any savings to fall back on. The 9% that did have savings had very low amounts – well below what was required for more expensive funerals.

Half of all borrowers went without food or fuel to repay the lender. Stop Loan Sharks found that often the lender becomes the client’s main priority debt. People in debt to loan sharks would sacrifice buying household essentials or paying rent to keep up with the loan. Whilst six in ten (60%) owed money to other lenders besides the loan shark.

Additional research showed that a quarter of working-age people (24%) experienced bereavement annually. Each year, around 8 million working-age people in the UK experience bereavement — many while juggling grief, work, and funeral arrangements with little or no support. This leads to 5% of bereaved employees leaving work within six months.

Nearly two thirds of adults fear the death of a loved one more than their own – and over 70% of people fear being left helpless and dependent if a loved one dies. and only one fifth of people had made financial arrangements for their funeral, and just two in five had spoken to friends or family about what they would like for their funeral.

Joanne Regan, Director of Operations of FuneralExperts.com said “No family should be forced into debt simply to say goodbye. Yet every day we hear from people who feel trapped, facing funeral costs they cannot afford, with nowhere to turn. In that moment of grief, many are pushed towards illegal loan sharks or overcharged by providers who should know better.”

Dave Benbow, Head of the England Illegal Money Lending Team (IMLT), (the official name for Stop Loan Sharks), said “Funerals can be costly, and when someone passes away suddenly or unexpectedly, it’s often an expense that hasn’t been planned for. This can leave families needing to find money quickly, at a time when they are grieving and emotionally overwhelmed. That’s the last thing they should have to deal with.

“Unfortunately, illegal lenders often take advantage of people when they are at their most vulnerable. Situations like this can be seen as an opportunity for them to exploit those in distress.

“There is help available to cover funeral costs, but in the midst of such a painful time, families may struggle to manage both their grief and their finances. We strongly urge people not to borrow from illegal lenders, even if they seem like a friend offering a favour. There are much safer and more supportive alternatives, such as credit unions and Community Development Finance Institutions (CDFIs). If anyone has already borrowed from an illegal lender, we encourage them to contact our team as soon as possible for support.”