Funeral care and the FCA

It’s hard to think of anything more important than giving our loved ones a good send off when they die – with a suitable funeral service and smooth settlement of their affairs.

The total annual spend on funerals in the UK is estimated at £2 billion – with the average core cost being around £4,300 plus an additional £2,000 on discretionary items like flowers and catering.

Latest figures show that 667,030 people died in the UK in 2021 – 62,352 more than normal over the past five year.

Sadly, our friends and relatives do not always get the funeral and the dignified ‘afterlife’ which they deserve.

Even before Covid came along, the UK’s deceased were not always receiving the best of service – even though they never knew it, such is the nature of the funeral business. The bereaved are not in the best frame of mind to shop around like they would for any other service. As a result, funeral costs have been spiraling for over a decade and levels of service are inconsistent.

The pandemic introduced a whole new set of challenges, with funerals being subject to lockdown restrictions. At one point only six people were allowed to attend a funeral and there were long periods where mourners could not hug and had to maintain social distancing.

Thankfully, change is on the horizon and things are being cleaned up in the funerals sector.
In a few months the grim reaper will be taking a scythe to funeral plan providers who have failed to get authorization from the Financial Conduct Authority (FCA).

Latest figures show that there are 1,573,000 undrawn funeral plans (an insurance-type product to cover the cost of a funeral when you die). Yet for too long the funeral plan industry has been poorly regulated with accusations of mis-selling and other poor practices. There has been a culture of firms charging large commissions and administration fees.

Following an investigation by the Government, as of July 29 all providers of funeral plans must be authorized by the FCA. It is a long overdue but welcome move. The reforms mean that consumers will have proper protection for the first time.

If a funeral scheme goes bust after July then the plan will be protected by the Financial Services Compensation Scheme. There will be a ban on firms cold calling to sell funeral plans and the intention is that everyone will get the plan they paid for.

Many people will unfortunately discover that they have been sold bogus policies and may only get back a small proportion of what they paid in.

The overhaul of funeral plans is expected to foreshadow wider reforms in the funeral and crematoria sector. The Competitions and Markets Authority (CMA) launched an investigation in March 2019 and implemented closer monitoring of funeral directors and crematoria last September.

These measures were designed as ‘sunlight’ remedies to shine a light on pricing and practices and to ensure that deceased people are cared for properly. Future regulation may include price caps on funerals or other stringent measures.

Now is the key moment for funeral directors, crematoria and associated service providers – including law firms who specialize in probate – to build trust with consumers through positive PR.

With such change ahead in the funeral sector those firms who are proactive in their communications strategy have a window of opportunity to showcase their expertise and probity through media channels.

It is also wise at this time of flux for firms to have crisis PR and reputation plans in place. Companies who deal with clients during such emotional and important life moments must uphold the highest standards of communications.

Is your funeral business or associated company looking for PR support? Why not get in touch with our team of experts today to discuss how we could support you during this period of change in the sector?

Get in touch with the team