A Freedom of Information request by insurer Royal London found that 31% of the 3,835 public health funerals carried out last year took place because relatives did not have enough money to pay for a basic funeral, which costs £3,757 on average.

A paupers’ or public health funeral is a no-frills service provided by the local authority if the deceased has no family or the family are unable or unwilling to cover the cost of the funeral.

Local authorities spent almost £5.4m on public health funerals in the 2017/18 financial year, representing a 3.5% increase on the previous year.

Research by Royal London found that 12% of bereaved families went into to debt after paying for a loved one’s funeral.

The competition watchdog is due to launch a full market investigation into funeral providers after an initial report highlighted concerns about large price hikes.

The Competition and Markets Authority (CMA) said people generally spend between £3,000 and £5,000 organising a funeral, and the price of the essential elements has increased by more than two-thirds in the last 10 years, almost three times the rate of inflation.

It said larger chains, in particular, had implemented policies of consistently high year-on-year price increases.

Louise Eaton-Terry, funeral cost expert at Royal London, said: “Local authorities are raising burial and cremation fees as they face cuts in funding from central Government.

“This is one of the key drivers of funeral cost inflation and ultimately results in an increase in the number of public health funerals local councils have to perform, as bereaved families are unable to pay for their loved one’s send off. More support is needed to help those struggling with funeral costs and the government needs to improve the funeral payment benefit to help tackle funeral poverty.”