23rd May 2025
Despite wide regional differences in funeral costs, most prepaid funeral plan providers still charge a flat fee nationwide. In this article I explore whether that approach can truly deliver fair value under the FCA’s Consumer Duty.
Regional pricing is something which is common in all walks of life. Everyone knows that it’s cheaper to buy a pint in Aberdeen than it is in London. And regional pricing is also prevalent in insurance too. This reflects the reality that the price of providing a service be it car repairs, medical care, or funerals can vary significantly in different parts of the country.
However, when it comes to prepaid funeral plan providers, there are only two providers in the market that currently offer plans which vary in cost depending on your location. All others continue to charge a flat price, regardless of where you live.
This begs the question, how can funeral plan providers justify they are providing fair value to all their customers? For those living in areas of the country where funeral costs are much lower, Northern Ireland, for example, to be paying the same as someone where costs are much higher like in London suggests they would not be getting good value from a prepaid plan.
According to Sunlife’s 2025 Cost of Dying Report the average cost of an at-need funeral in Northern Ireland costs £3441 compared to £5449 in London. With costs in London 58% higher how can a price for all represent good value to those who live in areas where costs are significantly lower?
This is especially important in products where third party costs are not guaranteed by plans which leave customers' families at risk of paying more at the time of need. On average these plans are covering third party costs up to £1,100. In more expensive parts of the country this will almost definitely leave the family with more to pay at the time of need. These types of plans need to have regionally priced disbursement allowances to improve customer outcomes.
Funeral plan prices have also been rising in the past 12 months, with many major providers increasing their prices. This will put extra pressure on them to prove to the FCA that these price rises still meet fair value requirements.
I think regional pricing is something that providers may need to incorporate to prove to the regulator they are meeting the requirements of the FCA’s consumer duty. The Consumer Duty requires that firms must deliver good outcomes for customers, including fair value. A one-size-fits-all pricing model risks falling short, especially when local cost discrepancies are so stark.