Britain’s £2 billion funeral market is facing a major investigation after the competition watchdog found prices have been soaring for “well over a decade”, putting vulnerable people at risk of exploitation.
The Competition and Markets Authority (CMA) said it had “serious concerns” after interim findings of its inquiry launched six months ago uncovered above-inflation price rises for funeral director and crematoria services.
It found the price of the essential elements of a funeral had increased by more than two-thirds in the last 10 years, almost three times the rate of inflation.
Costs for cremations – which now account for 77% of all funerals – have rocketed by 84% on average, it added.
— Competition & Markets Authority (@CMAgovUK) November 29, 2018
The CMA said it believed the full powers of a major market investigation were now needed, given the scale of the issues uncovered.
It said: “Initial work indicates problems with the market that have led to above-inflation price rises for well over a decade – both for funeral director services and crematoria services.
“The scale of these price rises does not currently appear to be justified by cost increases or quality improvements.”
Shares in listed funerals firm Dignity plunged 13% after the CMA announcement.
It comes as the Government is also planning a crackdown on so-called rip-off pre-paid funeral plan providers who prey on the vulnerable.
The Treasury is proposing bringing the sector under the regulation of the Financial Conduct Authority after evidence showed elderly people are being “pressured, harassed and misled” by some operators.
CMA chief executive Andrea Coscelli said: “People mourning the loss of a loved one are extremely vulnerable and at risk of being exploited.
“We need to make sure that they are protected at such an emotional time and we’re very concerned about the substantial increases in funeral prices over the past decade.
“We now feel that the full powers of a market investigation are required to address the issues we have found.”
The CMA’s research so far has shown that people generally spend £3,000 to £5,000 organising a funeral.
This would now represent nearly 40% of annual outgoings for those on the lowest income – more than they spend on food, clothing and energy combined.
It also found that customers can save more than £1,000 by looking at a range of choices in their local area, although many are in distress and unable to do this, leaving them vulnerable to high prices.
The CMA wants to hear from people who have experienced poor practices in the sector and wider industry views on the issues it has identified by January 4.
Ian Strang, co-founder of funeral comparison site Beyond, said: “It is a clear indication of how the UK’s funeral sector has been allowed to become like the Wild West.”