Once the preserve of local tradespeople, who could make a coffin, organise an event, assist with transportation and even dig a grave when asked, these skills are now consolidated into the Funeral Director we recognise today. Small family firms or larger groups carry out the majority of funerals assisting families with their multiple needs and wishes and serve an increasingly wealthier, culturally and ethnically diverse population. 600, 000 funerals take place a year; we hear when things go wrong, but that leaves a lot (the overwhelming majority) that go right.
Funerals, it is true, are changing. They take longer from the care of the deceased, the time spent with the family to make the arrangements to the funeral itself (which in the extreme can take up a full day). This coupled with the extraordinary rise in disbursement costs means it is hardly surprising that funeral costs have risen. That funerals are unaffordable now is often laid at the door of the Funeral Director, and the rhetoric is often predicated by an advert for a funeral plan: “Buy now or you won’t be able to afford a funeral”.
There is no doubt a funeral plan properly written designed and costed will provide both for the Funeral Director and the family. Monies taken from a family at the time the plan is written, if sensibly invested, have always been returned at the time of need with growth usually in line with inflation or more, i.e. between 2-3% per annum minimum. These monies should be enough to carry out the plan without margins, or service, been eroded.
So why is there tension now with many plans falling short and having insufficient funds compared with ‘at need’ prices today?
In the early 90s I travelled the North East selling coffins to local Funeral Directors. As I recall, this was a time when the plan market did not exist and ‘at need’ prices were paid. Then my competitors were Olaf Johnson and Carwoods and I was selling a basic wood veneer coffin for around £40. Today the same coffin is around £90, an increase of 2.5% per annum and roughly in line with inflation (CPI / RPI). The same can be said for cars, fuel, overhead costs like electricity and business rates and staff wages. Cremation fees in a North East council owned crematoria, however, once cost about £150 and now come in at around £800, a rise of 6% per annum and more than twice the level of inflation. The story is the same by and large across the country.
If this doesn’t sound a lot, year on year the fiscal figure is significant. If cremation costs had only risen by the 2.5% per annum, fees now would be around £350, a difference of £450. This is over a large period of time and plans generally last around 5 to 7 years so the difference is less, but still significant.
When a funeral plan is arranged with a Funeral Director and detailed, dependent on the arrangement, the costs are precise. It is not un-reasonable therefore to estimate costs in the future based on inflation. But this has not been the case so a shortfall has to be realised. Also, the monies given are not all invested; fees and commissions are deducted. These vary across the many plan providers and are not always declared to the customer or Funeral Director. These factors further add to fiscal pressure.
Most funeral plans are also sold as packages; useful as they effectively package a funeral into something that people can easily understand. However, the fact they are not detailed is adding a further dynamic into the equation. These newer style plans, by their nature, do not specify precisely their content and I note the coffin provisions have been eroded. For instance, a leading plan provider used to make provision for solid coffins in the top of the range plan and a basic wood veneer coffin in the starter plans. The funeral trade would always service the plan using a good quality solid oak panel sided raised lid coffin and seek to use the plain veneer coffin on the starter plans. This is no longer the case. The words used to describe the coffin have been generalised, using words like ‘superior’ and ‘traditional’ and I notice more recently the term ‘wood effect’. I assume this is now a green light for the plans to be serviced with a basic wood effect printed cardboard coffins.
This would all be fine but for the fact that the lack of description is misleading and the changes have never been explained to the public. A funeral, relative to other expenditure, costs a lot of money and yet clarity is lacking. I don’t know anyone who would pay for an annual holiday and not know the standard of hotel they were going to stay in so why is this lack of clarity in funeral plans acceptable?
Whether a plan is sold by a Funeral Director or someone not in the funeral trade the public deserve to know what the cost of the plan is, i.e. how much will the Funeral Director get, what are the commission and fees the agent and plan provider will take, and the detail contained within the plan?
I hope the Treasury enquiry will make these recommendations to greater transparency, otherwise I worry dissatisfaction will grow within the funeral trade and spread amongst the public. The result of which would be a distrust of the funeral sector and an undoing of all that we have discreetly achieved over generations to deliver the expertise and quality of care that we do today. I don’t believe any of us want to see that happen.
Julian Atkinson, MD JC Atkinson