This year we published our sixth annual funeral cost report. It has been a busy year in the industry and it is clear that it change is on its way. The Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA) are taking action with reviews and regulations – but is enough being done?
National funeral costs
There has been little change in the average cost of a funeral this year with the cost going up £28 since last year to £3,785. This increase is lower than the rate of general inflation which suggests that funeral costs are beginning to stabilise. The main driver for this year’s increase is mostly down to rising burial and cremation fees. We’ve actually seen funeral directors put their fees down slightly this year.
The cost of a funeral can vary drastically between locations. Kensal Green in London is the most expensive place in the UK for a funeral, with the average costing £8,150. The least expensive is Belfast in Northern Ireland, with an average of £2,934. A burial funeral can be even pricier, with a burial in Kensal Green costing on average £13,163 – making the difference between the most and least expensive locations in the UK more than £10,000.
This year we looked a little bit more into the amount that people spend on funerals, given the increase in lower cost options being offered by providers. What we have seen is this amount is actually going up, with people spending on average £3,989 on a funeral – more than the average cost of a simple funeral. Our research showed that one in four people said they went above and beyond their loved one’s funeral wishes, with 11% of those spending more than £1,000 over what was wished for by the deceased.
Hitting the poorest the hardest
What’s worrying is that there is little difference in the amount people spend on a funeral based on their level of income. People on low incomes are spending much more of their income on a funeral, meaning they’re left worse off than those on higher incomes. We have questioned why there isn’t more support available for people on low incomes to meet funeral costs, in the same way as there are schemes for other essential costs such as council tax and rent.
Low cost options
It’s worth knowing that there are still ways to avoid spending a great deal on a funeral. Low cost options such as a no-frills funeral, also called a direct cremation, can help keep costs down by agreeing to hold the funeral at a time which is most convenient for the crematoria and has no mourners present. Families will often hold a wake separate from the cremation.
Worryingly we found that for more than third of people arranging a funeral, low cost options weren’t discussed by either the consumer or the funeral director. We’d like the funeral industry to be more open about the options available and make sure they discuss how much people want to, or can afford to, spend when making the arrangements. Our hope is that by doing this, the costs won’t mount up.
Funeral debt and state support
Sadly, there are many people who are unable to scrape together enough to cover the cost of a funeral. This year we found that 12% of people who’ve arranged one struggled to cover the cost, that’s around 74,000 bereaved families across the UK. People often have no choice but to take on large amounts of debt – £1,990 on average – just to pay for their loved one’s funeral. This is a record high amount since we first started our research six years ago.
The state does offer some support, but it isn’t enough. The average amount that successful applicants receive doesn’t meet the full cost of a simple funeral. We calculated that even with funding from the government’s Funeral Expenses Payment (FEP), mourners are left with an average shortfall of more than £2,300.
Unfortunately, to make up the shortfall, grieving families are pushed into debt by using credit cards, loans or overdrafts. Some even have to resort borrowing money from family or friends or selling their possessions.
We are asking the Government to improve this benefit by making the value of the payments higher. We also believe that the application process and waiting time for a decision needs to be improved – it is complicated and takes too long at the moment.
There are signs that things will improve in the funeral industry – we just hope that the changes will go far enough to make things better for those that need it most.
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