By the end of 2020, it is estimated that there will be almost 1.6 million new funeral plans sold, according to recent research.
Market research consultancy, IRN Research, this week published the ‘Funeral Plans Consumer Research Report 2020’ which looks at the pre-paid funeral plan market and sets that into the context of how consumers pay for their funeral. It considers consumer use of funeral plans and other means they use to pay for their funeral, especially over50s insurance. It includes an assessment of the size of the market and its trends, and profiles of leading suppliers.
While the number has continued to rise in recent years, there has been a notable slowdown in growth in recent years. The number of new sales has declined steadily since 2016 mainly because of competition from over50s life insurance policies. Like the UK economy, the funeral plan market has faced a roller coaster year in 2020 because of COVID-19. As a result of COVID-19, net new sales in 2020 (gross sales less plans drawn down) are expected to be only around one-quarter of the number seen in 2019.
There are results from a nationally representative survey of 2,093 consumers exploring their understanding of funeral plans, and a survey of 196 consumers that have funeral plans. The funeral plan market is being reshaped today by a number of key factors, including:
- COVID-19, leading to a significant rise in deaths in 2020 and possibly into 2021, thereby increasing the number of plans drawn down and making it harder for funeral directors to sell new plans.
- Increasing competition from substitute products like over 50s life insurance and traditional life insurance.
- The continued rise in funeral costs.
- Proposed new FCA regulation of funeral plans, which will significantly raise costs for plan providers and possibly prevent some from selling new policies.