Law firms and local authorities are driving up the cost of dying, say the nation's funeral directors.

They say the costs of a funeral have gone up by 3.9 per cent in the past year, driven largely by higher council fees for burials or cremations, while the estate administration costs, mainly lawyers' fees, have risen by a huge 39 per cent.

A recent study conducted by mutual insurer Royal London found the cost of a funeral in the UK is now £3,551, and 109,000 UK adults have incurred funeral debt averaging £1,305.

Of 2000 people who had arranged a funeral in the past five years, almost half said that it had cost them more than expected and 42 per cent of those admitted they had problems meeting the cost.

Over a third used their own savings to help pay for it, while 28 per cent borrowed money from family or friends, with one in five of these needing to use a credit card or loan.

The National Association of Funeral Directors said a further report this week from Sun Life was "further evidence of the increasing financial strain being placed upon the bereaved, coupled with the inadequacy of government support for those who are unable to afford the cost of even the most basic funeral". It repeated its call to index link Social Fund funeral payments to cost of living increases.

The Sun Life report shows the costs of the funeral now represent only 43 per cent of the overall costs which follow a death. Alan Slater, chief executive of the National Association of Funeral Directors, said: "It seems that, increasingly, we have lawyers and local authorities to hold to account for the rising cost of dying. We have already called upon the government to examine the double digit increases levied by many local councils for a burial plot or cremation, but perhaps questions also need to be asked of the legal profession about whether they are taking unfair advantage of families when they are at their most vulnerable."

He said: "Sadly this is often leading to the bereaved piling money on expensive credit cards, being forced into the arms of payday loan companies or, increasingly, failing to pay, which leaves funeral directors with unsustainable levels of debt."

The Institute of Cemetery & Crematorium Management says shortage of burial space is becoming a major concern. Chief executive Tim Morris said: "The only sustainable option is for the governments in Scotland, England and Wales to introduce legislation that permits the reuse of old abandoned graves." He said the Royal London report suggested the public agreed.

On funeral plans, Dom Maguire, chairman, of Anderson Maguire Funeral Directors in Glasgow, said: "People must be careful as the figures quoted are not only for the funeral but include fees for solicitors and other third parties which may or may not be necessary in many cases. It highlights the need for people to have made adequate preparation for end of life expenses but like every product of a financial nature, they should read carefully and fully understand what they are buying and what it will pay when that time comes."