The annual Royal London National Funeral Cost Index Report for 2018 has just been released and as usual makes interesting reading. Carrying the heading ‘Buried in Debt – The price of a good send off’, the report highlights how funeral costs have changed over the last year, funeral debt, changes in the market and the UK’s attitude to making funeral arrangements.
The report does provide encouraging news about funeral costs however there are still some major concerns over the industry in general and how the government is responding to these concerns.
It shows the average cost of a funeral remaining virtually unchanged at £3,757, however this Royal London figure is always significantly lower than the one reported on by SunLife in their Cost of Dying report. The SunLife report is due out shortly so it will be interesting to note the differences and whether their message is as encouraging.
Here are the main Royal London funeral cost report headlines:
Changes in funeral costs
When it comes to funeral costs, it’s a story of two halves. Unfortunately both cremation and burial fees continue to rise by 6.1%; three times the rate of inflation. The saving grace here is that Funeral Directors’ costs have actually decreased by 4.5%, from an average of £2,254 in 2017 to £2,153.
This dip represents major industry developments, namely Dignity cutting their funeral directors costs and the Co op Funeralcare freezing their fees.
So encouraging news about the funeral directors charges which now represents 66% of the total cost of a cremation funeral and 50% of total costs for a burial.
Going forward therefore it’s the cremation fees and burial fees that really need addressing. The Royal London report makes reference to the increase in private crematoriums, charging 17% more when compared to local authority crematoria and the costs of maintaining unprofitable cemeteries that are either full or nearly full.
As a result, the Royal London report calls for a change in regulation allowing for the sensitive re-use of abandoned old graves.
Postcode lottery over regional pricing continues
As ever, where you live has a huge impact on paying for a funeral. As you would expect, London is by far the most expensive region with average funeral costs of £4,838. In contrast, the cheapest place to die is Belfast, with costs of just £2,950.
Although the cost of a funeral varies depending on where you live, the report highlights 10 locations where the amount you pay for a funeral varies depending on which local funeral director you choose. For example, in Croydon, the cheapest funeral director charged just £880 compared to the most expensive charging £3,195; a whopping difference of £2,315.
So the moral of the story here is that regardless of whether you live in one of the more expensive areas, it still pays to shop around and compare funeral prices.
Families are still facing funeral debt
Actually the number of people getting into debt as a result of paying for a funeral has actually dropped from 95,000 to 75,000, however the amount of debt has actually increased to a record high of £1,744 – a huge 34% increase based on last year’s Royal London funeral costs report.
Although the report doesn’t mention this, one possible reason for the increase in the amount of debt could possibly be attributed to the reduction in the number of debtors if they were at the lower end of the credit scale, as this would automatically push up the overall average debt.
Therefore it would be interesting to know if the decrease in debtors was partly attributed to families choosing cheaper funeral options such as direct cremation.
Introduction of new cheap funeral alternatives
Although Co op Funeralcare recently announced that direct cremation which is a cremation without a funeral service accounted for around 10% of their cremation funerals, Royal London reports a lower figure. Of those surveyed, 6% said that the last funeral service they organised was cremation only with a separate memorial or celebration of life held later at a different location, with a further 2% arranging a cremation with no funeral or memorial service of any description.
The Royal London report suggests that direct cremation, which is half the cost of a traditional funeral service may not be the answer to funeral poverty, as less affluent households reject the idea of arranging a cremation with no funeral.
It does state later on though that 32% of those arranging a funeral were not informed of the low cost more affordable funeral packages by their funeral director, so this lack of interest may just be down to lack of awareness.
At the end of the day, funeral directors and funeral plan providers alike may not be quite so keen to advertise direct cremation and other cheap funeral options as they are not as lucrative, so greater customer awareness is required as a matter of urgency.
The one point that shines through the Royal London National Funeral Costs Index Report is that be it pride or social pressure, when it comes to arranging a funeral, many families throughout the UK would rather face debt than see a family member or close friend go without a ‘proper’ send off. In fact the poorest households actually spent more on more personal choices like a coffin or headstone than the more affluent groups.
It will be interesting to watch if and how this changes over coming years and whether the younger generation adopt a more modern approach to an industry that has seen little change until recently.