UK's CMA investigates funerals sectorStaff Writer | June 1, 2018
The CMA is launching a review into the £2 billion funerals market to ensure that people are not getting a bad deal.
Britain Demand for funeral plans has grown significantly
It will also look at how prices have changed over time and the factors that affect them.
The average cost of a funeral was nearly £3,800 in 2017 – not counting extras that can add another £2000 to the total bill. Affordability and debt can therefore be a real concern to many people, with those on the lowest incomes potentially spending up to one third of their annual income on a funeral.
The rising level of cremation fees will be considered as part of the review, with cremations now estimated to account for around 75% of all funerals.
In parallel to the CMA’s market study, HM Treasury is launching a separate Call for Evidence on regulation in the pre-paid funerals sector. The CMA therefore does not intend to examine the pre-paid sector within its market study.
Views are welcome on any of the issues raised in the statement of scope by the 28 June.
An interim report, presenting initial findings and views on potential remedies, will be published in 6 months, ahead of the final report in a year’s time.
If it finds issues of particular concern, the CMA could take further action, such as opening consumer or competition enforcement cases or launching a full market investigation.
New plans to stop grieving families from being ripped off have been announced. The government will consult on tougher regulation for the pre-paid funeral plan sector, and propose bringing the market into the supervision of the Financial Conduct Authority (FCA).
People at their most vulnerable are being pressured, harassed and misled by some pre-paid funeral plan providers, according to research conducted by Citizens Advice Scotland and Fairer Finance. Approximately 95% of the funeral plan sector is voluntarily regulated by the Funeral Planning Authority (FPA), a self-regulatory body.
The FPA does not have the power to prevent pre-paid funeral plan providers from trading, and while it does have a code of practice for its members, this code is not legally binding.
Demand for funeral plans has grown significantly in recent years, with annual sales up roughly 245% between 2006 and 2017, but the regulations have remained unchanged since 2001. ■