The competition watchdog the Competition and Markets Authority (CMA) says consumers have been subject to above-inflation price hikes for over a decade.
As a result, the government body has announced it intends to use its full powers to launch a market investigation carried out by an independent group of CMA panel members.
The CMA first announced in May that is was launching an investigation into the funeral market to examine whether information provided by funeral directors on prices and services is clear enough for consumers.
Its preliminary results have found that people pay two-thirds more now, typically between £3,000 and £5,000 organising funerals, than they did a decade ago. The average funeral now costs £4,271.
This increase is three times the rate of general inflation. Prices as measured by CPI inflation have grown by 25% in the past decade. Meanwhile, average funeral director prices have increased by 68% and crematoria fees have grown by 84%.
The CMA says that consumers could save thousands by shopping around when looking for a funeral. But it says unscrupulous funeral directors take advantage of vulnerable bereaved families and charge higher prices.
A lack of online pricing is also an issue.
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It says smaller funeral providers typically keep prices low, but bigger chains in particular consistently hike prices year on year. It says low-cost options that these chains have introduced “don’t go far enough to make up for the years of above-inflation price hikes”.
Andrea Coscelli, chief executive of the CMA, comments: “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. We also want to hear from people who have experienced poor practices in the sector so that we can take any action needed to fix these problems.”
Responding to the CMA announcement, Pippa Wicks, deputy chief executive for the Co-op, one of the UK's largest funeral services providers, comments: “We have worked closely with the CMA throughout their market study, and note their proposal to begin a market investigation.
“Over the last three years we have started to tackle funeral affordability by reducing prices on our most affordable funerals and introducing new choices for our clients. Through this period we have seen an increasing number of families choosing lower cost options, and we are committed to continuing to provide even more affordable choices.
“However we recognise that there is still more to do and we welcome any measures from the CMA that will protect families and ensure that they have access to high standards of funeral care at an affordable price.”