NAFPP Report on Funeral Plan Trends 2024

Introduction
The National Association of Funeral Plan Providers was founded in 2023 following regulation of the sector by the Financial Conduct Authority (FCA). Its membership comprises all twenty-six organisations currently authorised to provide or hold pre-paid funeral plans. As the sector’s trade association, we collate data and share market amalgamated intelligence with our members in accordance with CMA guidelines on collaboration. In recent years, simpler send offs have become more popular. In 2024, we asked members about the proportion of new plans designed to provide unattended funerals, also known as direct cremations.
Our member’s purpose is to assist bereaved families. Every case is unique and plan holders becoming better informed about funeral choices will be able to make more appropriate decisions for their families. In publishing this data, we hope to play our part in stimulating those conversations
We are the sole source of robust market volumes and have complete visibility of customer preferences across the sector. While some classification variability between members exists, we remain the only credible source of this data.

Indicators of a changing market
Recent publications have examined the number of simple funerals. This is the first comprehensive test applied to pre-purchased funeral plans. Many sources have reported a rising proportion of direct cremations. The Cremation Society reported the figure of 15% for 2023. Sector analyst Funeral Solutions Expert reported data collected from working with independent funeral directors indicated that 14% of the funerals that group conducted were unattended in 2024. This was up from 11% in the preceding year. The centralised funeral businesses who specialise in direct cremations will have experienced a higher proportion than the more traditional high street funeral directors.
Sun Life’s 2024 Cost of Dying report suggests that one in five of all funerals were direct cremations. At 20% this is the highest estimate for the proportion of unattended funerals that we have seen in print. Of course, if arrangements were made for an unattended cremation, but a family service or gatherings was organised separately, then the Cremation Society would not be aware. That may explain why their total was lower than that estimated by Sun Life. Confusingly, there will also be some overlap in reporting periods which might better explain the variance.

Prepaid Funeral Plans
The picture for pre-paid funeral plan purchases is starkly different, and examining the reasons for this divergence is crucial to any understanding of customer’s preferences and the future trends to be expected in UK funerals.
Plans aimed to secure an unattended funeral were in a majority in 2024. Some 62% of all new plans opened in 2024 were of this type. That translates into 114,282 new contracts last year. This raises the obvious question. Why is such differing behaviour evident when setting out preferences in advance as opposed to those chosen by families at the time of need? Of course, we must acknowledge the customer profiles of the two groups of consumers are not identical. Funeral plans have traditionally been bought by less affluent consumers. At-need funerals are, by definition, purchased by families from all social groups and affluence brackets.

Where the death is accidental or unexpected that gap in results could be understandable, but a high proportion of deaths follow bouts of prolonged illness, and the elderly do discuss their intentions with family, so we would expect to have seen a stronger correlation between the two sets of results.
Another key variable, of course, is that the individual making the decision is different. Often a loved one or family member after the passing, but the individual themselves when pre-planning. Does that planning ahead imbue a more pragmatic sense of perspective in the individual? Potentially that viewpoint may more often be overridden by emotion in the case of the bereaved loved one. Whatever the reason it appears that many make a different assessment when pre-planning, often many years in advance, than when informing family of wishes closer to the time itself.

Influences on our choices
There are external forces exerting influences on individual behaviours. The activity of the sector itself must impact on the outlook of customers. We considered the proportions of customers electing both types of plans through the four quarters of 2024. The conventional wisdom is that there are two main triggers which prompt an individual to buy a plan. Historically, attending the funeral of a friend or family member will lead someone to make their own arrangements. The other prominent call to action is advertising of pre-paid plans and whole of life insurance policies designed to fund funeral expenses.

Comparing the marketing media spend by funeral planning companies with the numbers of plans bought in the following months, there is indeed evidence of a relationship. Looking at a sample of the most prolific advertisers we see the heaviest investment (30% of annual spend) deployed in the Autumn of 2023, and after allowing for an appropriate time lag, we see that the 29% of all sales were reported in the first quarter of 2024. For unattended cremations, the concentration was higher at 30 percent. Those correlations continue for the remainder of the year with sales in the following quarter rising and falling broadly in line with previous marketing effort.
How this might explain part of the mismatch between the levels of pre-need and the post need selections of unattended plans becomes clearer when we realise that the marketing spending was dominated by brands who only offer direct cremations and those who, although offering a wider range, prioritised their 2023/24 advertising messaging on the simpler variant.

Of course, those stimulated to take out a plan after attending a funeral will, by definition, have been unlikely to have been at an unattended cremation. However, they will have been conscious of the national advertising and any discussion about a new plan with any provider is likely to include that option. This factor, in itself, cannot drive the accelerated rate of pre-planned unattended cremations, but as the numbers experiencing this service following the death of a friend or family member increases, that familiarity with the concept must also increase the propensity for the purchaser to select the same option.
In an economy that has still to emerge fully from a persistent cost of living crisis, the relative expense must also be a factor in the growing popularity of products that only offer the essential elements of a cremation funeral. That rational economic factors appear to weigh more heavily in the cases of planned decisions is understood. No one is suggesting a funeral is an impulse purchase, but at need complicated emotions are clearly more of a factor. Direct cremations may be substantially cheaper than a more traditional service. Coupled with our knowledge that a larger proportion of pre-need contract buyers come from less affluent households; this may be a substantive factor driving growth in this option’s popularity. However, providers’ research lists factors other than cost as the reasons why customers chose a direct cremation, notably differing attitudes to funerals and a younger generation being the decision maker. Clearly, there is no one single reason.

While considering the impact of price we can introduce a further element to consider. From a high in March 2024 the volumes of new direct cremation plans taken out fell in a linear fashion through the succeeding quarters. The same was not true for more traditional plans which reduced in the early part of the summer but recovered to higher levels as the year progressed. We have no evidence of the drivers of that specific divergence but would observe that several providers of unattended funeral plans repriced these contracts in the period between February and September. With little evidence of a similar increase in the price of more traditional arrangements over the same period, this is another factor to be included in any assessment.

The Context
Funeral plans remain a straightforward way to plan for the sendoff you want while removing the task of organising and paying for the event from your loved ones. Now regulated by the FCA and underpinned by the Financial Services Compensation Scheme, funeral plans have never been more secure. Trends and fashions change, but the underlying human desire to prepare for the future remains. Funeral plans remain an attractive source of comfort and reassurance for today’s population.
For providers, the objective is to deliver choice and certainty to their customers. This is the most personal and sensitive of services, it is not merely another financial services product and so should not be considered on a one-dimensional economic basis. To do so would be to ignore the undoubted importance to families of being
able to grieve appropriately, and the more traditional services provide those additional opportunities which will be crucial to many. Every family is unique. Their needs and preferences at times of stain will differ and we, as an association, are keen to promote a wider debate on this topic as a way of better informing the public of the relative benefits of the range of options offered by our members and the wider funeral sector.