The UK funeral business is booming and is currently estimated at £1.7bn per year. There are few industries with a steady income as strong as the funeral sector around 600,000 funerals take place each year.
In fact, 2016 was the first time in decades that there was an increase in the national death rate, supposedly influenced by the jump in dementia and Alzheimer’s related deaths. However, the UK’s trend to make funerals more elegant and bespoke has caused the cost of funerals to rise dramatically.
About the industry
The Cooperative and Dignity own around 33 per cent of the market share, with the Coop having around 700 branches across the country and Dignity being prevalent in the North of England with over 500 branches. The Cooperative also has regional groups including East Anglia, Yorkshire and Oxford. Elsewhere, the industry is made up of several independent and privately-owned funeral parlours such as Poppy’s Funerals.
The funeral industry is currently not regulated but there are organisations in place to uphold standards including the Funeral Planning Authority and Association of Funeral Directors.
How the cost of funerals is increasing rapidly
The average cost of a Christian funeral in the UK is currently between £3,600 and £4,500, depending of course on the region and household. The cost, however, is rising year-on-year at a rate of around six per cent, almost double than the UK’s inflation rate this year at three per cent. This calculates to a cost of ?7,000 expected by 2026 and £12,000 by 2036 which is causing alarm bells.
But why such an increase
Traditional funerals will typically involve a funeral director to help oversee the proceedings. Their roles include transporting the deceased body, embalming, handling all paperwork, dealing with the deceased personal affairs, arranging the ceremony and this includes the coffin, the hall, the service, flowers and food.
The use of a funeral director is no small feat and comes at a cost of around £2,000 to £2,500 per funeral, and is usually incorporated in most packages. With a strong demand for funerals and destressed families in need of receiving help, the director fees remain strong and there is little incentive to offer lower rates.
Being a funeral director is a strong career path, with around 4,000 funeral directors in the UK and its own governing body in the National Association of Funeral Directors.
Other trends include the popularity of showing respect for our loved ones by spending big on their funeral. There is almost a sentiment of the more you love them, the more you pay. This can transcend to expensive coffins, a large hearse limousine (around £300), memorial plaque (up to £1,000), catering (around £400), flowers ( £150) and staff to assist at the funeral.
How to save on funeral costs
The cost of cremation is significantly less, almost half, with the average cremation costing £1,600. In addition, avoiding the use of a funeral director can save thousands of pounds but can require a lot of manual paperwork, bookings and phone calling to arrange the event which may not be ideal given the circumstances.
Some funds are available to help save up for a funeral. Notably, the Jewish community in the UK have to pay their annual membership fees for their local synagogue, of which a percentage is reserved for their funeral. So, when the time comes, the synagogue can automatically pay for your funeral and little financial involvement is required by the family.
Above all, there has been a rise in the use of prepaid funeral plans. This is an insurance policy that effectively pays out when you die. Individuals can choose to pay for a plan upfront, which is fixed at today’s funeral prices so you pay £3,000 today, rather than the £12,000 could you be charged when you die in 20 or 30 years” time. Or you have the option to pay monthly at around £25 per month. Funeral plans can be purchased for yourself or for your loved ones and relatives.
