Ballooning costs and unclear pricing have prompted HM Treasury and the Competition and Markets Authority (CMA) to launch separate investigations into the funeral sector.
Which? looks into why the £2bn funeral market is facing a government crackdown and how to cover the cost of your own funeral.
Why is the funeral market being investigated?
Funeral costs have continued to increase year on year, making affordability a growing concern for many people.
In 2017, the average cost of a basic funeral was £3,784 – up 3% from £3,675 in 2016, according to Royal London’s national funeral costs index.
However, extra features like acquiring a burial plot and memorial flowers could add another £2,000 to the total bill.
A recent report from SunLife revealed that the average cost of a basic funeral was as low as £1,920 in 2004 but could more than double by 2022 to £4,944.
People who struggled to cover the cost of a funeral took on debt of £1,680 – a £79 rise from 2016 and a £375 rise from 2014.
The CMA will be investigating whether or not funeral services have transparent pricing information so that bereaved families can get a fair deal.
The rising cost of cremations, which now account for 75% of funerals, will also form part of the CMA’s review.
In parallel, the Treasury is launching an investigation, in a bid to clamp down on businesses mis-selling prepaid funeral plans.
Funeral plans allow you to pay upfront for your own funeral so that your relatives don’t have to cover all of the costs themselves.
Daniel Gordon, senior director of markets at the CMA, said: ‘As part of this study, we want to ensure that people can at least receive clear information on prices and the services making up a funeral, and that people get a fair deal on the cremation fees charged.’
John Glen, Economic Secretary to the Treasury, said: ‘It breaks my heart to think that our oldest and most vulnerable are being pressured into funeral plans that leave their grieving families out of pocket’
- Find out more: funeral plans explained
How much does a funeral cost?
The cost of a funeral will vary significantly depending on the type of service you choose and any extras you add – but also, to some extent, the part of the country in which the funeral takes place.
In 2017, funerals in London were found to be the most expensive, costing an average of £4,779.
Northern Ireland was the cheapest region for funeral expenses,with an average cost of £3,036.
The map below shows how the average cost of funerals differs regionally in the UK.
To find out how much the average funeral costs in your city or county, search using the table below.
- Find out more:how to make a will
Covering the cost of your funeral
Arranging a funeral is a highly emotional experience that is generally difficult to plan for in advance. There are, however, a number of ways to help cover the cost of your own funeral, including:
Funeral plans allow you to pay for your funeral upfront so that your relatives don’t have to cover the full cost themselves.
The level of cover can differ between providers – for example, your funeral plan may cover the cost of viewing the deceased, a limousine procession and church service, but may not the cost of a burial plot or flowers.
These costs would then have to be covered by your family.
Over-50s life insurance
Over-50s life insurance policies pay out a lump sum to your family when you die, which could be used for funeral expenses.
One of the drawbacks of relying on a life insurance policy is that the pay-out does not increase with inflation.
This means that you could end up paying more in your premiums than the sum that can be claimed at the end.
For example buying a £10-a-month policy with Aviva at age 50 would pay out £3,347. But, by the age of 77, you would have already have paid this much in premiums.
- Find out more: types of life insurance policy
Savings accounts allow your funeral savings to grow with interest.
It’s important to set up your designated savings account in a joint name with a trusted family member so that they are able to access the money after you pass away.
- Find out more: how to find the best savings account
Paying from your estate
Funeral costs can also be paid from your estate after you die.
Banks will normally release funds if they’re presented with an itemised bill from a funeral director and a copy of the death certificate.
If you’d like your funeral to adhere to specific cultural or religious traditions, it’s important to specify this in your will.