Direct Line magazine

Financial support for when you lose someone you love

Updated on: 5 September 2022

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Disclaimer: The information in this guide is for general guidance and is not legal advice.

Losing someone you love can be extremely tough. You're bound to feel a range of emotions and there's no right or wrong way to grieve. But, sometimes knowing there is support available can bring some peace of mind. The same can be said for the practical stuff, too.

Whilst finance is probably the last thing on your mind after losing your partner, there might be financial matters that need taking care of such as wills, inheritance tax, and maybe even debt. It can all become overwhelming, so knowing where to go for advice and support might make things a bit better. 

What financial matters would I need to look after?

Apart from grief, you may find yourself having to deal with things like wills, probate an inheritance. For example, you could be name executor of your partner or spouse's will. 

What is a will?

A will is a legal document letting loved ones know what you would like to happen with your estate. For a will to be legally recognised, it would need to be signed and witnessed.

Even if you don't feel like you have much to pass on to loved ones when you die, it's worth making a will so friends and family can carry out your last wishes. 

If you have children, a will makes it clear who you have chosen as their guardians.  

Dying without a will can cause even more stress for those you leave behind. It's a straightforward process which you can do really easily online. 

If you'd like more information on how to make a will, head over to our article. 

What is probate?

A will can also state who the deceased would like to carry out their wishes, this person is known as an executor. If you find yourself as an executor of a will, you'll need to apply for a grant of representation, letting you carry out these wishes. This is known as probate. 

What happens if I can't find a person's will?

If you're unsure where to find somebody's will, or if one even exists, Gov.uk offer guidance on finding a person's will (link will open in a new window). 

What is inheritance tax?

Inheritance tax is tax charged on possessions and money left by your loved one. The standard rate for inheritance tax is 40% and can be charged on a range of possessions, including property. Inheritance tax only applies if the estate in question is valued at £325,000 and over. 

However, you'll only pay tax on anything over the £325,000 threshold. 

For example:

If the property you've been left is worth £400,000, you'll only pay inheritance tax on £75,000. That means that in total, you'll pay £30,000 in tax. 

If the estate is valued at less than £325,000, no inheritance tax will be charged. 

More guidance on inheritsnce tax can be found here (link will open in a new browser). 

What is financial advice?

Financial advice is professional guidance on financial matters. It helps you to plan effectively and make important decisions about your money, property and accounts. 

Where can I get financial advice when someone dies?

Council tax, debt, loss of income, it's a lot to think about, and not something you want to deal with in times of stress. Perhaps the first thing to do is take some time to look at what financial support you need and what's available. 

There's many great services out there, including The Money Advice Service. 

We've pulled together a short list of things they can help with (all links will open in a new window):

Gov.uk also have a step-by-step guide, walking you through what to do when you lose your partner. It covers everything from registering their death to bereavement benefits. 

What are bereavement benefits?

Whilst it's not something we like to think about after losing a partner, there are bereavement benefits available to help you financially during such a tough time. 

Benefit type and entitlement will vary depending on your partner's age and circumstances. We've pulled together a short summary of what benefits are available:

  • Bereavement payment- this is a one-off tax free lump sum payment of £2,000. To be entitled, you must be under state pension age when your partner died.
  • Bereavement allowance- this is a taxable benefit payable for up to 52 weeks from the date your partner died. To be eligible, you need to be widowed between 45 and state pension age. 
  • Widowed Parent's Allowance- this is a payment of up to £126.35 a week (2022). You may be entitled if you're pregnant or have at least one dependent child, providing you are still entitled to Child Benefit and widowed while under state pension age. 

How do I apply for bereavement benefits?

Each benefit has its own conditions. 

Here's a few that apply:

  • All bereavement benefits are based on your spouse or civil partner's National Insurance contributions.
  • You will need to make a claim within three months from the date your partner died. 
  • Claims for bereavement benefits could affect other benefits you might be receiving. 

A full breakdown of the conditions that apply can be found here (link will open in a new window). 

What about life insurance?

By taking out life insurance, you can make sure your loved ones are taken care of, should the worst happen. Depending on the policy you choose, your family could receive a lump sum payment to cover mortage repayments, debts and other financial commitments when you pass away. 

To find out more about life insurance and which policy works for you, visit our website (link will open in a new window). 

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