Government’s funeral fund plans ‘don’t go far enough’, says co-op-backed campaign

Plans to help those who cannot afford their farewells to loved ones have been criticised by the Fair Funerals Campaign

The UK government has outlined plans to make its Social Fund Funeral Payment – available to those would otherwise be unable to afford a funeral – simpler and fairer.

However the Fair Funerals Campaign, led by Quaker Social Action (QSA) and supported by a number of co-operatives, believe the plans “don’t go nearly far enough”. The Fair Funerals Pledge has been signed by several co-operative funeral providers, including Lincolnshire, Heart of England, Scotmid, Tamworth and the Co-op Group.

Research by the Fair Funerals Campaign shows that one in seven would seriously struggle to afford a funeral if someone close to them died, with people taking on an average of £1,600 worth of debt to cover funeral costs. “For people on low incomes, this can have a devastating impact on future finances and get in the way of people’s ability to grieve,” says the research.

‘Not far enough’

“It’s great news that government has answered calls to do something for the thousands of people every year who find themselves unable to afford a funeral when someone they love dies,” said Heather Kennedy, Fair Funerals campaigns manager. “But these changes don’t go nearly far enough.

“They will do nothing to increase the value of the grant, which was capped in 2003 and now only pays for around 40% of a funeral. As the government has spent less and less on the grant in real terms, more grieving people have been forced into funeral poverty, left with huge debts they have no way of paying off.

“The government must commit to increase the value of the funeral grant. In the sixth richest nation in the world, surely we can make sure that everyone has access to a decent, respectful funeral.”

The government’s plans have addressed the contributions from charities, friends and relatives (which were previously deducted, pound for pound from the funeral fund application) and the claim period (to be extended from three to six months) and will make the application forms for children’s funerals shorter, “to reduce stress on the bereaved family”.

The plans also look at exemptions for people living in care homes; currently if you have another relative who isn’t receiving a qualifying benefit from the DWP, you won’t be eligible for the funeral grant. The government is proposing to make people living in care homes exempt, but Fair Funerals hopes this exemption will be extended to include anyone who is disabled, unwell or incapacitated.

Co-ops back call for regulation

Meanwhile, consumer group Fairer Finance has released a report, Is the prepaid funeral planning market working well for consumers?, outlining the potential limitations of some funeral plan products and calling for improved regulation in the market.

“Sadly, our report has uncovered a litany of problems in the sector – both in terms of conduct and consumer protection,” said By James Daley, managing director of Fairer Finance. “Although prepaid funeral plans often look and feel like insurance products, they remain unregulated – and the sector lacks the scrutiny and safety net that other financial sectors have.”

But, he added, “it’s important to say that we found good practice too. The Co-op, Dignity & Perfect Choice stood apart from the rest as doing more to promote transparency and fair value for consumers.”

Fairer Finance’s analysis looked at the lack of clarity in the sector, the mismatch of customer expectations, the effect of high pressure sales, the safety of consumer money and the lack of consumer protection, and outlined three options:

  • Introduce enhanced voluntary regulation and ensure better FCA support
  • Transform the current voluntary regulator into a statutory regulator
  • Bring the prepaid funeral plan sector under full FCA regulation.

Fairer Finance’s recommendations have been supported by Midcounties Co-operative Funeralcare.

“Whilst today’s report by Fairer Finance highlights the good practice of some funeral plan providers, with the Co-operative Funeral Plan credited with offering transparency and fair value for consumers, it also calls for much better regulation in the UK funeral plan market,” said Simon Fisher, chief operating officer for the Midcounties Co-operative Funeral Group.

“As a registered member of the Funeral Planning Authority (FPA), this is something we are fully supportive of, as parts of the industry need tighter controls on the marketing of funeral plans. This will ensure customers are fully aware of the limitations of some pre-paid plans so they can be confident the plan meets their needs.”