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Funeral industry could be investigated after 'substantial' price increases

Funeral industry could be investigated after 'substantial' price increases

The cost of a cremation has increased by 84% on average, while the cost of a basic funeral has jumped by more than two thirds over the past 10 years, the competition watchdog has found.

The Competition and Markets Authority (CMA) is consulting on a major funerals probe because the hikes don't appear to be justified by cost increases or quality improvements.

This comes as an interim report indicates there are problems within the sector that have led to above inflation price rises for over a decade – both for funeral director and crematoria services.

See our Prepaid funeral plans guide and 20+ crucial checks to minimise financial trauma for more information.

What issues has the CMA found?

Issues found by the CMA during its six-month review include:

  • The price of the essential elements of a funeral has increased by more than two thirds in the last 10 years. The CMA says that today, people generally spend between £3,000 and £5,000 organising a funeral.

    It says for those on the lowest incomes, this amounts to nearly 40% of their annual outgoings, more than they spend on food, clothing and energy combined.

  • Customers could save over £1,000 by looking at a range of choices in their local area. Despite choice being available, the CMA says that people organising a funeral are usually distressed and often not in a position to do this – making it easier for some funeral directors to charge higher prices.

    The CMA has also found that prices are often not available online, making it difficult to compare options.

  • Some larger chains have implemented policies of consistently high year-on-year price increases. The CMA says that a number of these have now introduced lower cost funeral options, but this doesn't go far enough to make up for years of above inflation price hikes.

    The CMA's evidence also indicates most people who organise a funeral remain extremely vulnerable to exploitation and future rises in charges.

  • Fees charged by crematoria have increased by 84% on average in the past 10 years. The CMA says that cremations account for 77% of funerals, yet there are limited choices for most people in their local area.

    It says the cost increase amounts to more than three times the rate of inflation.

What happens next?

The CMA says it believes a full market investigation – carried out by an independent group of CMA panel members – is required.

It will now be consulting on the potential market investigation and welcomes any views on the issues identified in its report by 4 January 2019.

It would also like to hear from people involved in the industry and others, who may have observed instances of poor quality standards in the back-of-house facilities of funeral directors. Details on how to respond are available on the CMA website.

What does the CMA say?

CMA chief executive Andrea Coscelli said: "People mourning the loss of a loved one are extremely vulnerable and at risk of being exploited. We need to make sure that they are protected at such an emotional time, and we're very concerned about the substantial increases in funeral prices over the past decade.

"We now feel that the full powers of a market investigation are required to address the issues we have found. We also want to hear from people who have experienced poor practices in the sector, so that we can take any action needed to fix these problems."