Government and CMA launch simultaneous reviews into funerals market
PUBLISHED: 09:02 01 June 2018 | UPDATED: 14:20 01 June 2018
The UK’s £2bn funerals market is facing a two-pronged assault from government and a business watchdog.
The Treasury is proposing to bring the sector under the regulation of the Financial Conduct Authority (FCA) in an effort to crack down on “rip-off” pre-paid funeral plan providers who prey on the vulnerable.
Currently 95% of the market is voluntarily regulated by the Funeral Planning Authority (FPA), which lacks the power to prevent providers from trading, according to ministers.
The launch of its consultation process follows research conducted by Citizens Advice Scotland and Fairer Finance.
Simultaneously, the Competition and Markets Authority (CMA) has launched a review into the market to examine whether prices and services information is “clear enough” to ensure people are not getting a “bad deal”.
Rising fees for cremations – which now account for 75% of all funerals – will be included in the review.
The average funeral cost hit nearly £3,800 last year before “extras”, which the CMA said could add another £2,000 to the final bill.
Daniel Gordon, a senior director of markets at the CMA, said: “People can understandably be very emotionally vulnerable when planning a funeral.
“We therefore think it is important that – at what can be a particularly challenging time – the process is made as easy as possible.”
Ann Cobbold, director of independent firm Kevin Cobbold Funeral Services in Norwich, said large funeral companies could be “secretive” about their price structures.
“We have always been concerned that the big corporate companies buy up smaller funeral directors, which only results in them raising prices and lowering the quality of service.”
Shares in listed funeral provider Dignity plunged more than 14% at the start of trading.