Funeral Solution Expert recently released an independent study into the average cost of a funeral in the UK.
We previously called out in our last 2 Annual Funeral Plan Market reports as to how Over 50s life insurance firms are utilising headline average funeral cost stats which potentially mislead consumers into making more provision than they actually need for the funeral of their preference.
We made this representation to the FCA previously and will do so again given their stated intent to review the Over 50s market as part of their announced review of the Pure Protection market1 in the UK.
So, when we were approached by the Society of Allied and Independent Funeral Directors (SAIF) who shared similar concerns as to how funeral costs were being represented, we undertook our own independent study working in conjunction with SAIF. We sourced from Cremation Society data, desk research, from our own consumer survey among 9,000 UK adults, and from collecting data from over 200 independent funeral directors.
This is a headline summary of our work.
The cost of dying is ‘an’ average not ‘the’ average.
The Sun Life ‘Cost of Dying’ annual report has been a useful barometer down the years of funeral costs since this author first created it in 2004. However, it no longer represents ‘the’ average cost of a funeral, it simply produces ‘an’ average cost of a type of traditional burial and cremation funeral.
That report also includes a headline figure for a full-blown wake and all the probable trappings of a Victoriana funeral plus legal costs to wind up an estate, currently amounting to £9,658.
As an independent and unbiased research and consultancy business we have 2 concerns:
- The ‘Cost of Dying’ headline figure of £9k+ is now often misleadingly and confusingly used as a pseudo ‘average cost of a funeral’. This was perfectly highlighted in the opening salvo of an ITV Tonight broadcast in May 2024 where they quoted this as the average funeral cost. It’s a figure designed to shock the public and provoke a reaction playing into the ‘rising cost of a funeral’ narrative.
- The ‘average funeral cost’ quoted in the report, and widely used by others in the sector, is quite simply no longer accurate. Consumers and the market have moved on and the trend and lower cost associated with direct cremation funerals is not accurately reflected for in the headline figure of £4,141. With Funeral Directors routinely offering direct cremation as one of their funeral offerings, this is not included in the “average cost”.
So, what’s the real average cost and why does it matter?
Our study shows that that the reported average cost figure to be at least 12% higher than it currently should be. This is because Sun Life’s headline figure excludes direct cremations, which it says now account for 20% of all funerals, from its average funeral cost calculations. If these unattended send-offs were considered and included in the calculation, the average cost of a funeral in the UK in 2024 would be £3,682 rather than £4,141 – a sizeable £459 lower.
The reason it matters is how these headline average figures are used and for what purpose. The ‘average funeral cost’ and ‘the cost of dying’ were created as a marketing tool for an Over 50s life insurance firm. Used to help set the benchmark level of insurance cover a customer would need in order to pay for an ‘average’ funeral and given the vast majority of customers use this product towards funeral costs. At the time the Cost of Dying study was created, direct cremation was not an option, but it has been for the last 8 years, and direct cremation is one of the most common forms of funeral and the most popular funeral plan sold in the UK today2.
This figure has been widely adopted by other firms in the Over 50s and Funeral Plan sectors and often reported in the media and by funeral poverty charities. The more the headline figure goes up, and the more steeply, the more that consumers feel they need to make suitable provision for an ‘average’ funeral. This raises questions about the legitimacy of the figures and how they are being used in the purchase process of Over 50s life insurance in particular which may well transgress FCA Consumer Duty rules. Consumers need to be given sufficient information in marketing materials and during the sales process to understand their real need (i.e their funeral preference) and therefore a more appropriate level of cover. Therefore as there are many options they shouldn’t be selling cover for a full funeral (cost) if they want a direct cremation.
But costs are rising?
That’s not to say that funeral costs have not been rising in recent years nor that the sector has not been under significant cost pressures due to impacts such as the Covid pandemic, the Ukraine war and global energy prices, as well as inflationary costs affecting staffing, transport and all aspects related to funeral provision.
But what is evident is that consumers have been taking positive steps to restrict how much they want to pay for a funeral. Our consumer research of all those who have arranged a funeral in the past 2 years shows that the average spend on a UK funeral has in fact been around £3,850. Some way under the figure reported by Sun Life and frequently repeated by others.
Consumers are more aware of the wider offering from Funeral Directors, adopting direct cremation and increasingly drifting away from religious services. Whilst a traditional celebration of life funeral remains the most common UK funeral, and will be for generations to come, it will be as a lesser proportion and at a level of spend that reflects what next of kin are prepared to pay (and where a pre-paid funeral plan is not already in place with known wishes and a funeral paid for).
2 key factors supporting consumers to help keep funeral costs down
The first key factor is the rise of online providers with lower headline costs for direct cremation and some with optional levels of attended service. Our own independent data shows that c12% of all UK funerals are direct (unattended) cremations and rising, and that well over 50%+ of all pre-paid funeral plan sales are direct cremation and rising, which in turn will feed into future ‘at need’ funerals. An ‘at need’ direct cremation funeral is available today in the UK from £1,100.
The second key factor is the care and expertise of local independent Funeral Directors serving their communities. They are increasingly embracing direct cremation as an offering and realise it’s better to help and support families seeking this, as well as the additional support and guidance they can provide, than see business depart to an online only provider. A local independent, bound by the standards of quality care of an accredited trade body such as SAIF or NAFD, can help support any funeral and any request.
Our data shows that the average funeral cost through an independent Funeral Director in 2024 was £3,921 (some way below the reported headline average funeral figure) albeit this figure would be lower if we also factor in the lower cost of natural burial funerals and where they account for c40% of all burials and are around a third less expensive. This data was not included as part of our study.
The battle between online only providers and Independent Funeral Directors helping keep costs lower for consumers
Independent Funeral Directors face a significant challenge from online providers and new/online entrants, who have been growing rapidly.
Independent Funeral Directors are well set to compete however and given the extent to which consumers trust them and see them as the ‘experts’ when it comes to funerals. Consumers will need to be convinced of handing any aspect of a ‘performative’ attended funeral service to anyone other than a Funeral Director. The risk of something going wrong in the final act of saying farewell to a loved one is just too great.
However, it is this battle between new online players and Funeral Directors (whether national or independent) that will allow consumers even greater choice which in turn will help them keep spend to a budget that suits them and their funeral preferences. In fact, as the incidence of less traditional funerals increases and direct cremation and natural burial (as a currently underserved demand) increase, it may be that the rise in these types of funeral at lower cost, may offset rises in traditional costs.
Hence these changing consumer preferences combined with the removal of doctors’ fees from cremations (from Sept 2024) will likely mean the average cost of a funeral or indeed the average spent by a consumer may remain relatively flat for some time to come and below £4,000.
At FSE we are passionate about consumers making provision for their funeral and also engaging with their families to understand their wishes and the send off that best suits them. In reality there is no such thing as an ‘average funeral’. There are many types at many price points and it is possible to keep the cost down to reflect personal preference, financial situation and available options.
Our aim is to raise the profile of the misleading ‘average funeral cost’ issue and hence use this work to further engage with regulators, consumer influencers and the wider media.