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Funeral Planning - UK - October 2019

“Mainstream providers in both the at-need and pre-paid funerals market have to meet the needs of those seeking more traditional services, along with developing more flexible and personal options for customers. Serving these diverging sets of expectations is challenging and will result the development of new products, services and brands over the next few years designed to meet the growing demand for something different and more personal.”

– Deborah Osguthorpe, Category Director, UK Financial Services

This report examines the following issues:

  • Not wanting to think about death is not the main barrier to funeral planning
  • Pre-paid plans need more flexibility to widen appeal

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Value of overall funerals market will near £2.5 billion in 2019
              • Figure 1: Value of the funerals market, 2014-24
            • Regulation on the horizon for funerals market
              • Sales of pre-paid plans in decline as regulatory pressure mounts…
                • …but are expected to rebound as the market adjusts to new framework
                  • Figure 2: Fan chart of forecast for volume of pre-paid funeral plan sales, 2014-24
                • Number of deaths in UK up in 2018, but death rate remains stable
                  • Cremations make up 78% of UK funerals
                    • Cost of funerals continues to rise
                      • Companies and brands
                        • Co-op Funeralcare and Dignity hold a 28% share of market
                          • Figure 3: Provider share of number of funerals, 2018
                        • Three providers account for more than 70% of pre-paid funeral plan sales
                          • Figure 4: Market share of volume sales of pre-paid funeral plans, 2018
                        • Pricing competition intensifies between major players
                          • Low-cost funerals and direct cremations are focus of activity
                            • Funeral related adspend grew strongly in 2018/19
                              • Figure 5: Total above-the-line, online display and direct mail advertising expenditure on funeral expenses insurance, funeral directors and over-50s life protection, 2014/15-2018/19
                            • The consumer
                              • Most over-50s have given their own funeral some thought
                                • Figure 6: Consideration given to planning own funeral, June 2019
                              • Taking a passive approach
                                • Figure 7: Barriers to funeral planning, June 2019
                              • Pre-paid funeral plans lead the way
                                • Figure 8: How people expect to pay for funeral costs, June 2019
                              • Limited interest in taking out pre-paid funeral plans
                                • Figure 9: Interest in pre-paid funeral plans, June 2019
                              • Majority say they are aware of the cost of a funeral
                                • Figure 10: Agreement with attitude statements towards funeral planning, June 2019
                              • What we think
                              • Issues and Insights

                                • Not wanting to think about death is not the main barrier to funeral planning
                                  • The facts
                                    • The implications
                                      • Pre-paid plans need more flexibility to widen appeal
                                        • The facts
                                          • The implications
                                          • The Market – What You Need to Know

                                            • Value of overall funerals market will near £2.5 billion in 2019
                                              • Regulation on the horizon for funerals market
                                                • Sales of pre-paid plans in decline as regulatory pressure mounts…
                                                  • …but are expected to rebound as the market adjusts to new framework
                                                    • Number of deaths in UK up in 2018, but death rate remains stable
                                                      • Cremations make up 78% of UK funerals
                                                        • Cost of funerals continues to rise
                                                        • Market Size and Forecast – Value of Overall Funerals Market

                                                          • Funerals market expected to reach almost £2.5 billion in 2019
                                                            • Figure 11: Value of the UK funerals market, 2014-19
                                                          • Market forecast
                                                            • Figure 12: Value of the funerals market, 2014-24
                                                            • Figure 13: Value of the funerals market, 2014-24
                                                          • Forecast methodology
                                                          • Market Size and Forecast – Volume of Pre-Paid Funeral Plans

                                                            • Pre-paid funeral plan sales decline as regulatory pressure mounts
                                                              • Figure 14: Number of pre-paid funeral plan sales, 2014-19
                                                            • Almost 100,000 plans drawn down per year, with 1.4 million in force
                                                              • Figure 15: Number of plans drawn down and number of undrawn plans, 2009-19
                                                            • Market forecast
                                                              • Figure 16: Fan chart of forecast for volume of pre-paid funeral plan sales, 2014-24
                                                              • Figure 17: Forecast for volume of pre-paid funeral plan sales, 2014-24
                                                            • Forecast methodology
                                                            • Market Drivers

                                                              • The number of deaths peaked in 2018…
                                                                • Figure 18: Annual number of deaths in the UK, 2005-19*
                                                              • …but underlying death rate has been flat since 2011
                                                                • Figure 19: Age standardised mortality rates (ASMR), England and Wales, 2001-17
                                                              • Cremations account for growing proportion of funerals
                                                                • Cost of funerals continues to increase
                                                                  • Sales of over-50s life insurance boosted in 2018
                                                                    • Figure 20: Value and volume of guaranteed acceptance plan sales, 2014-19 (HY)
                                                                  • Growth in alternative funerals
                                                                    • …and direct cremations
                                                                    • Regulatory and Legislative Environment

                                                                      • Regulation on the horizon for funerals market
                                                                        • FCA to take on regulation of pre-paid funeral plans
                                                                          • Scotland leading the way in tackling funeral poverty
                                                                            • Quicker access to Funeral Expenses Payments
                                                                              • Children’s Funeral Fund established in England
                                                                              • Companies and Brands – What You Need to Know

                                                                                • Co-op Funeralcare and Dignity hold a 28% share of market
                                                                                  • Three providers account for more than 70% of pre-paid funeral plan sales
                                                                                    • Pricing competition intensifies between major players
                                                                                      • Low-cost funerals and direct cremations are focus of activity
                                                                                        • Funeral related adspend grew strongly in 2018/19
                                                                                        • Market Share – Number of Funerals

                                                                                          • Co-op Funeralcare and Dignity hold a 28% share of market
                                                                                            • Figure 21: Provider share of number of funerals, 2018
                                                                                        • Market Share – Pre-paid Funeral Plans

                                                                                          • Three providers account for more than 70% of plan sales
                                                                                              • Figure 22: Market share of volume sales of pre-paid funeral plans, 2018
                                                                                          • Competitive Strategies and Launch Activity

                                                                                            • Pricing competition intensifies between major players
                                                                                              • Dignity undertakes a business Transformation Plan
                                                                                                • Low-cost funerals and direct cremations are focus of activity
                                                                                                  • Co-op reduces cost of Simple Funeral and adds Cremation Without Ceremony service
                                                                                                    • Simplicity Cremations adds a small gathering option and a flexible low-cost option
                                                                                                      • Pure Cremation attracts significant investment
                                                                                                        • Major players focus on brand building and raising standards
                                                                                                          • Rebranding and increasing promotion
                                                                                                            • Pushing for higher standards
                                                                                                              • Moving funeral planning online
                                                                                                                • Comparison services expand
                                                                                                                  • Online death notices and memorials
                                                                                                                    • DeathTech starts to emerge
                                                                                                                      • Royal London launches a pre-paid funeral plan
                                                                                                                      • Advertising and Marketing Activity

                                                                                                                        • Funeral related adspend grew strongly in 2018/19…
                                                                                                                          • …but is still overshadowed by advertising of over-50s life insurance
                                                                                                                            • Figure 23: Total above-the-line, online display and direct mail advertising expenditure on funeral expenses insurance, funeral directors and over-50s life protection, 2014/15-2018/19
                                                                                                                          • TV and press account for highest proportion of adspend
                                                                                                                            • Figure 24: Total above-the-line, online display and direct mail advertising expenditure on funeral expenses insurance and funeral directors by media type, 2018/19
                                                                                                                          • Promis Life is leading advertiser of funeral plans/insurance
                                                                                                                            • Figure 25: Total above-the-line, online display and direct mail advertising expenditure for top 11 funeral expenses insurance advertisers, 2016/17 to 2018/19
                                                                                                                          • Dignity leads the way with its new Simplicity Cremations brand
                                                                                                                            • Figure 26: Total above-the-line, online display and direct mail advertising expenditure for top eight funeral directors advertisers, 2016/17 to 2018/19
                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                            • ABs are more likely to have funeral planning experience
                                                                                                                              • Most over-50s have given their own funeral some thought
                                                                                                                                • Taking a passive approach
                                                                                                                                  • Pre-paid funeral plans lead the way
                                                                                                                                    • Limited interest in taking out pre-paid funeral plans
                                                                                                                                      • Majority say they are aware of the cost of a funeral
                                                                                                                                      • Previous Experience of Planning a Funeral

                                                                                                                                        • 60% of over-50s have some funeral planning experience
                                                                                                                                          • ABs are more likely to take the lead on family funeral arrangements
                                                                                                                                            • Figure 27: Previous experience of planning a funeral, June 2019
                                                                                                                                        • Consideration Given to Planning Own Funeral

                                                                                                                                          • 30% of over-50s don’t expect to make own funeral plan
                                                                                                                                            • Over-75s are more likely to have made plans
                                                                                                                                              • Figure 28: Consideration given to planning own funeral, June 2019
                                                                                                                                            • Retirement leads to a shift in priorities
                                                                                                                                              • Figure 29: Consideration given to own funeral planning by age, June 2019
                                                                                                                                            • Women are more engaged than men
                                                                                                                                              • Past experience doesn’t necessarily prompt action on funeral planning
                                                                                                                                                • Figure 30: Consideration given to own funeral planning by previous experience of planning a funeral, June 2019
                                                                                                                                            • Barriers to Funeral Planning

                                                                                                                                              • Taking a passive approach
                                                                                                                                                • Providers have scope to address many of the main barriers
                                                                                                                                                  • Figure 31: Barriers to funeral planning, June 2019
                                                                                                                                                • 65-74s are more likely to be receptive to funeral planning
                                                                                                                                                • How People Expect to Pay for Funeral Costs

                                                                                                                                                  • Pre-paid funeral plans lead the way…
                                                                                                                                                    • Figure 32: How people expect to pay for funeral costs, June 2019
                                                                                                                                                  • …and are more likely to be held by 65-74 year olds
                                                                                                                                                    • Figure 33: How people expect to pay for funeral costs, by age group, June 2019
                                                                                                                                                • Interest in Pre-Paid Funeral Plans

                                                                                                                                                  • Limited interest in taking out pre-paid funeral plans…
                                                                                                                                                    • …with negative headlines undermining perceptions for some
                                                                                                                                                      • Figure 34: Interest in pre-paid funeral plans, June 2019
                                                                                                                                                    • Concerns about cost are holding back sales
                                                                                                                                                      • Promoting a clearer understanding of funeral plans could boost sales
                                                                                                                                                        • Figure 35: Barriers to funeral planning by interest in pre-paid funeral plans, June 2019
                                                                                                                                                    • Attitudes Towards Funeral Planning

                                                                                                                                                      • Majority say they are aware of the cost of a funeral…
                                                                                                                                                        • …and want to help limit any stress for their family
                                                                                                                                                          • Scope for a more flexible funeral planning product?
                                                                                                                                                            • Figure 36: Attitudes towards funeral planning, June 2019
                                                                                                                                                          • Around one in three want a personalised funeral
                                                                                                                                                            • Higher income married couples prefer to leave money to family
                                                                                                                                                              • Figure 37: Funeral Planning – CHAID – Tree output, June 2019
                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                              • Abbreviations
                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                  • CHAID analysis
                                                                                                                                                                    • Methodology
                                                                                                                                                                      • Figure 38: Funeral Planning – CHAID – Tree output, June 2019
                                                                                                                                                                      • Figure 39: Funeral Planning – CHAID – Table output, June 2019
                                                                                                                                                                  • Appendix – Market Size and Forecast – Value of Overall Funerals Market

                                                                                                                                                                      • Figure 40: Best- and worst-case for Value of the funerals market, 2014-24
                                                                                                                                                                    • Forecast methodology
                                                                                                                                                                    • Appendix – Market Size and Forecast – Volume of Pre-Paid Funeral Plans

                                                                                                                                                                        • Figure 41: Best- and worst-case forecast for volume of pre-paid funeral plan sales, 2014-24
                                                                                                                                                                      • Forecast methodology

                                                                                                                                                                      Funeral Planning - UK - October 2019

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