The cost of a funeral rose by more than 9 per cent last year in several regions of the UK, at a time when the sector is under regulatory scrutiny over high prices and a lack of transparency for consumers.
The growing expense of organising a funeral and affordability problems for lower-income groups have raised concerns among consumer campaigners and the competition regulator.
The annual Cost of Dying report from insurance provider SunLife found the average cost of a funeral had risen by over 9 per cent in the Midlands, Wales, the Southeast and East of England. The UK average was up 3.1 per cent to £9,493, it found, including the cost of a basic funeral (£4,417), a send-off (£2,306) and professional fees (£2,771).
London, although it is still the most expensive place for a funeral (£5,963), saw slower growth of 1.4 per cent.
The findings come as the Competition and Markets Authority conducts an investigation into the funeral market, following 14 years of above-inflation price rises in the sector. The CMA also highlighted the cost of crematoria services, where the largest private operators had bumped up prices by between 6 and 8 per cent a year for the previous eight years. Launched in March 2019, the investigation is set to conclude in September.
Activists have raised concerns over the soaring costs of funerals and the disproportionate impact of these costs on low-income customers. Fair Funerals, a campaign to end “funeral poverty”, said: “The data clearly shows that, over the last decade, funeral costs have risen at a rate far beyond other costs or people’s wages. Regulation and price caps are sorely needed.”
One of the issues examined by the CMA is that while customers could save more than £1,000 by looking at a range of funeral providers, grieving families are not in a position to shop around for a cheaper deal because costs are not clearly set out on marketing material or websites.
Fairer Finance, a consumer finance research company, is calling for statutory regulation of the funeral industry to be included in the CMA report, and greater transparency on the part of funeral providers when it comes to the prices customers might expect to pay.
James Daley, managing director of Fairer Finance, said: “It’s vital that the CMA forces all funeral directors to publish their prices in full on their website, so consumers can more easily shop around.”
He added: “It’s clear there’s still some [industry] opposition, and I think we’ll need statutory regulation to make this a reality across the industry.”
The National Association of Funeral Directors, an industry body, said the biggest cause of cost rises in the SunLife research was the professional fees associated with probate and increases in mandatory burial and cremation fees.
Jon Levett, NAFD chief executive, said: “While most funeral directors have held, or even reduced, their professional fees in recent years, the [SunLife] report also indicates that the overall cost of a funeral has risen due to families choosing more elaborate and personalised funeral options — which naturally adds to the cost.”
While calls for radical reform of the sector have been growing louder, some measures have already been taken to help consumers. In November, a day before Parliament was dissolved, the Department for Work and Pensions announced it was raising the funeral expenses payment from £700 to £1,000 — the first rise since 2003.
This means-tested expense is offered to those on certain state benefits. It covers expenses such as a director’s fees, flowers and the coffin, as well as a separate amount to help with burial fees, cremation fees, travel, death certificates and documents.
Louise Eaton-Terry, head of later life, retirement and savings at Royal London, said: “As funeral costs rise, so does the amount of debt the bereaved take on to pay for a loved one’s funeral. Those on the lowest incomes can have funeral debt hanging over them for years with the financial burden adding to the emotional grief they are dealing with.
“While the government will be increasing the value of the state support for funerals in the spring, we want them to commit to annual increases of the benefit if it really wants to have an impact.”