The Competition and Markets Authority (CMA) has launched a full in-depth market inquiry into the funerals sector following concerns over high price rises, a lack of transparency in the industry and exploitation of vulnerable consumers.
The thorough investigation came about following an initial publication of its interim report in November 2018, whereby the CMA launched a market study into the funeral sector following concerns that prices have been unfairly escalating for too long.
After carefully considering the consultation responses, the CMA “remains concerned about the effectiveness of competition in the funerals sector” and the investigation “will focus on the supply of services by funeral directors and the supply of crematoria services.”
The CMA has stated that they are concerned about the following:
- “The rise in the cost of organising a funeral, the essential elements of which have increased by 6% each year – twice the inflation rate – for the last 14 years. Funerals typically cost several thousand pounds which is a significant outlay for households.
- “The vulnerability of many people when organising a funeral, which may mean that they are not in a position to look at a range of choices. This appears to have made it easier for some funeral directors to charge high prices.
- “Reluctance of firms to publish/disclose clear prices, including online, or to provide comprehensive information on quality and range, making it difficult for people to compare funeral directors.
- “Low numbers of crematoria providers in local areas, and difficulty for new companies to enter the market due to the planning regime and high fixed costs.
- “High prices in relation to crematoria services – the largest private operators have implemented average price rises of between 6% and 8% each year for the past 8 years and some local authorities have also implemented large increases in fees.”
However, Dignity one the biggest funeral providers said it welcomes the review. Mike McCollum, Manager of Dignity said:
“Dignity has made clear that we welcome the CMA’s investigation into the funeral market and look forward to continuing our work with the CMA and other industry bodies to protect consumers.”
With the UK funeral market estimated to be worth around £1billion annually, and with over 600,000 funerals taking place each year, officials are worried about vulnerable consumers who are faced with arranging funerals for loved ones, while grieving themselves. This puts people under immense time pressure so other options are not explored.
The average spend per funeral is between £3,000 and £5,000. The CMA pointed out that those on low incomes could therefore be spending up to 40% of their annual salary on a funeral for their loved ones – and the CMA are concerned that businesses are failing to disclose clear pricing and quality information.
The CMA has said the sole purpose of the inquiry is to “further examine the competition concerns identified and decide what action, if any, is appropriate.”
What do you think should be done to avoid exploitation of funeral planning in the future?
