The Scottish Government has been urged to launch a review of burial plots, internment and cremation fees charged by councils and private crematoriums.
Citizens Advice Scotland (CAS) claimed many bereaved families were struggling to pay existing costs and called on SNP ministers to ensure what people were expected to pay was fair.
It claimed a “postcode lottery” existed in Scotland and the average cost of a simple funeral was £3,240 – a increase of 7% year on year since 2004.
CAS said the rise has occurred against a background of falling incomes and a cut in emergency assistance for funerals which had left some families unable to bury their loved ones.
The organisation wants the UK department for work and pensions to assess if social fund funeral expenses payments met actual costs.
CAS head of policy Susan McPhee said: “People who have never organised a funeral are often shocked at how expensive it is.
“There are charges for the grave site as well as fees to the undertakers and the cost of the coffin.
“Our research has found the average cost in Scotland for a simple funeral is £3,240.
“That’s a lot of money for a family to find at a time of emotional stress – particularly when the bereavement is unexpected.”
Funeral poverty campaigner the Rev Bryan Kerr of Greyfriars Church of Scotland in Lanark said he was “not surprised” by the report findings.
He wants national insurance contributions to pay for burials and cremations.
A Scottish Government spokeswoman said local authorities and private funeral directors set fees and charges
“We would, however, be willing to explore these issues further with the relevant authorities and organisations,” she added.
A spokeswoman for local government group Cosla said people struggling to pay funeral costs should apply for support through funds like the Scottish Welfare Fund.
She added that councils were entitled to set their own fees but continued “to fight for the rights” of people on low incomes and those entitled to welfare benefits.
A DWP spokesman said funeral payments made to people entitled to support made a contribution towards a simple respectful funeral.
“The necessary costs of burial or cremation are met in full including the costs of purchasing a burial plot,” she added.