Research by insurer Sun Life Direct found that the total cost of dying, including bills for probate, headstones and flowers, as well as the basic cost of a funeral, now stands at £7,622, an increase of 7.1% on 2012.

Average funeral costs have also continued to rise well above inflation and now stand at £3,456, a 5.3% increase on 2012 and 80% higher than when the survey was first conducted in 2004.

The report showed that burials are significantly more expensive than cremations with the average burial at £3,914, costing almost £1,000 more than the average cremation at £2,998.

It said that although increased funeral costs are commonly due to funeral directors hiking up prices, this year the rise was due to disbursement fees – in particular cremation and burial fees which are usually controlled by local authorities.

Since 2007 burial fees have risen by 69% and cremation fees by 51%.

Discretionary funeral costs, the additional funeral costs beyond the basics such as family flowers, catering, and limos, also recorded a rise.

The average amount spent on funeral extras increased £83 to £2,006 (4.3%), with the cost of a memorial accounting for a large part of this expenditure (43%) at £864.

These rises come as research revealed that many families continue to struggle with rising funeral costs. Almost one in five people who have organised a funeral in the past four years struggled, with the average shortfall rising from £1,246 to £1,277 year on year.

Total funeral poverty (the national funeral funding shortfall) now stands at just over £13m, over 50% higher than the £85m figure of three years ago.

The situation is likely to worsen over the coming years. Sun Life Direct projects the average funeral cost will rise by as much as £4,326 in 2018, proving unaffordable for many more.

There are significant variations between the ‘cost of dying’ between parts of the country.

The average cost of dying in the London area now stands at a staggering £9,556, significantly higher than the national average. The least expensive place to die is Wales where the average cost stands at £6,096.

Melanie Rees of Sun Life Direct said: “As over 100,000 people struggle to pay for a funeral this year, an important message for everyone should be to do something to prepare, however small. The death of a loved one is a difficult time, and is only compounded by financial worries over how to pay for the funeral.

“Drawing on savings can be one way to cover the cost. However, as funeral poverty stands at just over £131m, savings are clearly not an option for everyone. In old age, savings can deplete; advising people to rely on money they may not even have is irresponsible and more financial options should be available. As funeral poverty has increased 50% in just three years, something must be done as a matter of urgency before more families are unable to give their loved ones the send-off they deserve”.