The Government is considering new rules to police the funeral industry after ‘ITV News Show UK’ revealed that consumers are spending billions of pounds for funerals before they pass away.
In an ITV Tonight programme (which was broadcast last Thursday) bereaved relatives are calling for new regulation in this booming industry.
New figures obtained by the show strongly indicated that customers are keen to ‘buy before they die’ in order to avoid the rising cost of their own funeral.
In light of the pre-pay funeral sector growing exponentially, the Government is looking at new rules to monitor the sector – as at present, there is no statutory regulation of the industry.
The Funeral Planning Authority reveal new figures below which show the vast scale of the “pay before you die” funeral plan industry:
- 1.35 million plans have been sold
- 200,000 plans have been sold in the last 12 months
- £4.3 billion has now been set aside for prepaid funerals
- £3,185 is the average value of a funeral plan
Graeme McAusland of the Funeral Planning Authority told ITV News: “I think funeral plans are a really good way for people to put in place the sort of funeral they want in a controlled and thoughtful way. “It allows people to manage the costs in terms of what the funeral is going to cost them.”
Pre-pay firms offer a choice of options arranging from between around £2000 and £6000.
Once a customer has decided to use a pre-pay firm they contact an undertaker and guarantee that no matter how much funeral directors’ fees increase in the future they will honour the price the customer originally agreed at today’s prices for their final send-off.
The pre-pay firm manages the plan up until the time of the customer’s death and afterwards. As well as using the customer’s money to pay for the funeral director, the firm often keeps a slice for themselves – they say this is normal business practice but does mean that less money goes to the undertaker than the customer originally paid into the plan.
As stated by ITV News, the pre-plan firms are under no legal obligations to disclose what portion of the customers’ money they keep as profit or to cover their overheads – but the industry says consumers still get a good price because wholesale prices are negotiated.
However, James Daley, a financial expert, was appointed by a funeral company to investigate the industry – he found that some companies were charging consumers a lot more than others and admin fees can vary from one company to another.
James Daley said: “The scale of the admin fees can be anything from a couple of hundred pounds for some companies who are really modest and actually trying to do the right thing in this sector – up to £600/£700 in other cases.”
James further added: “Make sure you are very clear on what’s included and isn’t included – and get it written down. Communicate all of that to your family so that those people who might be carrying out your funeral and organising it for you are very clear about what you expected”.
Due to the pre-paid funeral industry growing so rapidly, there have been concerns that consumers’ understanding of them will not have kept up to the pace – as many firms list certain items as not being covered in the plan.
As a professional Will-writer, what is your opinion of the pre-paid funeral boom? Would you welcome the regulation of this sector?
