Dual investigation into the funeral sector
The rising costs of funerals should come as no surprise, almost all UK prices have increased year on year. The bill for being laid to rest or cremated is rising at well above the rate of inflation, now at its highest point since 2012.
The average cost of a basic funeral today stands at £4,078, this raises concerns about affordability and debt, especially for low-income households who are already feeling financial pressure every day. What’s more, funeral costs, as with most things in Britain, can vary according to where you live, London, not surprisingly is the priciest area, double that of some parts of the country. In fact, it’s now estimated that one in six people will end up with an average debt of £1,680 and that’s just for 2018.
Early this month, it was finally announced that the Competition and Markets Authority (CMA) will be launching an investigation into Britain’s £2bn funerals market, amid growing concerns that, at the very moment they’re most vulnerable, bereaved families are not being told the whole story.
The report will examine whether the information provided by funeral directors on prices and cremation fees, which now accounts for 75% of all funerals across the UK. The report will establish if the service information is ‘sufficiently clear’ for people to be able to select the best options available to them. This might include a lower cost funeral or discussing the different costs of their local crematorium venues.
But that’s not all…
As part of the industry shake-up, the Treasury has launched a separate review into the sector over growing concerns of ‘bad practice’ from pre-paid funeral plan providers. Some providers have been accused of misleading advertising and aggressive cold calling, and worst of all, providing little if any customer protection if the management of funds is poor or unethical.
One solution will be to regulate the sale and management of Funeral Plans via the Financial Conduct Authority (FCA), and a consultation process has begun.
So why is this good news…
It’s easy to see that prices and the quality of service can differ dramatically between funeral directors, the investigations into the funeral sector will encourage greater transparency which immediately benefits the bereaved, and ultimately strengthens their business. It would be a huge benefit for the industry to work with the Government to produce sensible regulations and standards that shine a light on the good work of the majority of our dedicated and hardworking funeral professionals.
Tougher regulations will also help promote effective competition amongst funeral providers. When consumers can easily access the information that they need (e.g. prices for different service levels) through the channels that suit them (e.g. a funeral director’s website) well informed they can make better choices. This means funeral providers will finally have to win custom on the basis of service, quality, price, and innovation. Overall it will generate a better outcome for consumers. Providers who get it right will thrive whilst unsuccessful providers, who continue to take the customer for granted, will fail.
Commenting on the news that the Competition and Markets Authority is launching an investigation into the price of funerals Catherine Powell, co-founder, and director of Pure Cremation, says:
“This review of funeral pricing will help open up the conversation about what people actually want, need and value when it comes to saying goodbye to a loved one. The bereaved should be treated as vulnerable consumers and given much more help to make informed decisions. While the professional and compassionate service funeral directors deliver can be incredibly good value for money, it is high time the true cost of delivering a cremation is reflected in the amount a consumer pays. Many believe that funerals are priced as “distress purchases” and this review is a great opportunity to make recommendations that restore public confidence in the industry.
“Our team are at the European Cremation Network meeting in Brussels this week looking at cremation practice and policy across Europe so that we can be at the cutting edge in this arena, as well as high quality, low-cost care given to clients.
“We are about to build and open the UK’s first facility that makes direct cremation an integral part of the business model. This will play a key role in ensuring that the bereaved have easy access to low-cost cremations that other providers only offer on a limited basis, if at all.”
The industry as a whole does valuable work that has a big impact on those served, but it has a long way to go. For too long funeral directors have enjoyed the luxury of telling customers what they should have; these reviews are the first steps towards a new and healthier culture where the customer is in charge. Bring it on.