Finance Consumer Funerals don’t need to be expensive to be dignified: How to save thousands of dollars

Funerals don’t need to be expensive to be dignified: How to save thousands of dollars

How to save money on funeral expenses. Photo: Getty
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Grieving Australians could be saving “thousands” of dollars in funeral costs but are often ripped off at their most vulnerable by aggressive up-selling tactics on unnecessary ‘bells and whistles’.

One family was quoted a hefty $8000 for a no-service, no-attendance cremation, according to an industry insider.

While services can be expensive, there are ways to keep costs down.

Ethical investments expert Dr Sandra van der Laan said it is a myth that funerals need to be expensive.

“I’ve been made to feel guilty about cutting costs – the attitude was that if I really cared about my loved one, I wouldn’t be asking questions,” she said, describing her own experience ringing funeral directors for quotes after a death in the family.

“The number of people who have contacted me about being ripped off is just unbelievable.

“It’s actually not a lot of money to do what’s required.”

This follows The New Daily‘s investigation into funeral insurance which revealed that premiums are often much higher than any eventual pay-out benefit for consumers.

How much does a funeral cost?

There are 160,000 deaths in Australia every year, with the funeral industry raking in $1.5 billion in revenue.

Funeral costs can entail anything from a death notice in the paper, to venue hire, flowers, funeral director service fees, transport, a coffin, death certificate, cemetery plot and headstone, celebrant or clergy, burial or cremation fees and refreshments for the wake.

The average cost of a funeral is $6000, but it can vary from $4000 to more than $15,000, according to corporate watchdog ASIC.

Malcolm Pittendrigh, national director of not-for-profit Salvos Funerals, said people care about giving a dignified send-off and feel compelled to pay whatever is needed.

“People are vulnerable, often confused and upset, when they’re grieving,” he said.

“There can be quite a bit of up-selling involved in the industry. Funeral directors can steer consumers towards a more expensive coffin.”

About 40 per cent of the overall cost is collected in funeral director service fees, according to InvoCare – Australia’s largest funeral service provider.

Consumer group CHOICE said quotes for funeral director fees can range from $450 to $2750.

The Funeral Directors Association of NSW told The New Daily that disbursement fees charged by the funeral director, paid to external parties, can be more than 75 per cent of overall costs.

How to save money on funeral expenses

While there are mandatory costs involved with death care, consumers can save money by shopping around and opting out of extras.

Mr Pittendrigh told The New Daily Australians are often quite price conscious.

“Margins on coffins and professional service fees can vary quite substantially,” he said.

The difference can be thousands of dollars.

“We’ve had families who have been presented with quotes for a basic cremation ranging from $1500 to over $8000. It’s quite extraordinary.”

He said it was common for families to avoid the costs of a hearse by having an early coffin transfer in another form of transport such as a van.

“There’s been a real trend towards lower cost cremations with a memorial service,” Mr Pittendrigh said.

“There is no coffin or service, and no time constraints.

“This is still quite dignified and more affordable as it wipes out half a dozen services involved in a funeral including service fees.”

CHOICE advised consumers to ask for an itemised price list over the phone before arranging a meeting with any funeral director.

“Shop around. That’s what people don’t do when they’re grieving,” Dr van der Laan said.

“A direct committal – a cremation or burial without a service – costs about $1500. If you’re paying more than $2000 then you’re paying too much.”

She said death notices and condolence books are less relevant these days where Australians announce the death of a loved one on social media or create an electronic ‘virtual memorial’.

Funeral payment options

ASIC lists superannuation, a prepaid funeral, funeral bond or funeral insurance as alternative ways to fund a funeral.

But Dr van der Laan said funeral insurance is largely “fostering the illusion that funerals need to be expensive” due to ongoing, costly premiums.

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