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Plans for price caps on funerals shelved due to coronavirus pandemic

Plans for price caps on funerals shelved due to coronavirus pandemic

The competition watchdog has said the funeral market must be reformed after its investigation of the sector found high fees and "unacceptably low levels of care" – but it's warned it can't push ahead with major reforms, including caps on prices during the ongoing coronavirus pandemic.

The Competition and Markets Authority (CMA) launched an investigation into the funeral sector last year due to concerns that grieving families weren't getting a good deal.

And today it's released its provisional findings, which show that crematoria and funeral directors have been increasing their fees above inflation over the last decade and often don't show consistent pricing information.

The CMA's report also highlights that many people will often not be in a position to compare different providers due to the emotional distress of arranging a funeral for a loved one.

However, the watchdog said its investigation had been seriously affected by the coronavirus pandemic, and that some of the reforms it had been considering, including price controls, cannot be safely introduced "in the middle of a national emergency".

For more help on funerals and funeral planning, see our Prepaid Funerals and What to do when someone dies guides.

What did the funerals market investigation find?

The CMA's investigation highlighted a series of issues in the funeral sector:

  • Many grieving families aren't able to compare funeral providers effectively due to the distress of planning a funeral, and will often choose a recommended or familiar funeral director, or their most local crematorium.

    Most also have little choice when deciding on a crematorium as there is usually only one option that is reasonably close to them, as crematoria are often scarce because of planning barriers and the costs involved in running them.

  • Pricing and product information isn't provided consistently by funeral directors, making it difficult for people to compare different offers.

  • Fees charged by funeral directors and crematoria have increased at a rate "well above" inflation over the past decade.

  • Funeral directors are not regulated in England, Wales and Northern Ireland, and some are providing "unacceptably low levels of care" of the deceased, though many do reach good standards.

However, the CMA admitted its investigation has been seriously affected by coronavirus. It said there has been a huge increase in demand for funerals as a result of the pandemic, meaning it has been difficult to gather data from funeral directors, crematoria and local authorities.

And the types of funerals people have been able to have during this time have been changed due to Government restrictions, making it challenging to carry out effective research.

What action is the CMA taking now – and what's been shelved?

The CMA said the coronavirus pandemic has created "insurmountable obstacles" to creating far-reaching reforms of the funeral sector at the moment.

For example, one of the measures the CMA was considering was introducing price controls on funerals. But the CMA said these can't be safely introduced during a national emergency – and the pandemic makes it difficult to predict the future profitability of funeral directors and crematoria, making it hard to design price controls.

Other measures which had been under consideration include the launch of an independent online platform where you can compare funeral prices, and getting local authorities to play a greater role in arranging funerals. However, the CMA said local authorities and central Government have very limited capacity at the moment due to coronavirus.

While the most far-reaching reforms under consideration have been shelved, the CMA has made some provisional decisions and proposals for action now, which it will consult on and then issue final plans by March next year. Under these proposals:

  • Funeral directors and crematoria would be required to give customers information on and prices of the services they offer. The CMA said this would help make sure people can easily access information about services and costs to decide on a funeral arrangement.

  • Funeral directors and crematoria would need to give the CMA key financial data every quarter under a proposal which would allow the CMA to keep monitoring the sector.

  • The UK Government and devolved administrations in Wales and Northern Ireland would be asked to set up an inspection system to check the quality of funeral director services. There is already a similar system in Scotland.

The CMA said its initial proposals will "open the door" to further changes such as price controls once it's feasible to introduce them.

What does the watchdog say?

CMA panel inquiry chair Martin Coleman said: "Given the inherently distressing circumstances in which people arrange a funeral, we want to make sure they can be confident that they are not being overcharged and that their loved one is cared for properly – this is what our investigation has focused on.

"The later stages of the investigation have been conducted in the midst of the coronavirus pandemic, which has caused a tragic increase in death rates and has materially changed how funerals are carried out. This has had a big impact on how far we can immediately address some of the issues we have identified.

"But there are remedies that are feasible and effective in the short term. We are proposing a package of 'sunlight' remedies, which will shine a light for consumers on the pricing and practices of the sector and make sure that deceased people are cared for properly. This will ensure that the prices of funeral directors and crematoria, and the quality of the service that funeral directors provide, are exposed to greater scrutiny, helping people to make the right choices during an incredibly difficult time.

"Further change in the sector is necessary, but some of the remedies we were considering could not safely be introduced in the middle of a national emergency. Our proposals will hold open the door to price controls when circumstances created by the pandemic change sufficiently to permit these to be considered."