New figures have found the average cost of a basic funeral has leapt by £140 in the space of a year.
Across the UK, the typical cost is now £3,702, marking a 3.9% increase compared with 2014, when the average cost was £3,562, Royal London said.
A basic funeral would include a coffin, a hearse and a simple, no-frills service but it would not include expenses such as flowers, venue hire and limousine hire.
The Scottish Government announced on the back of the figures that it would "look at ways of relieving the financial burden and debt that bereaved relatives and friends face".
Currently funeral payments for people with low incomes from the Department for Work and Pensions are reserved to Westminster but the benefit is expected to be devolved following the Smith Commission.
Ministers said DWP payments averaged at £1,375 in 2014/2015 leaving a significant shortfall against the cost of a low cost funeral.
Sally Foster Fulton, the Convener of the Church and Society Council of The Church of Scotland told Premier the report was welcome.
She said: "It's a huge issue. If you look in the past decade funeral prices in Scotland have risen by 92%.
"For folk who are living day to day and on the edge just to survive, when something like this happens it can really cause a great deal of distress anxiety and fear at a time when there is already is a great deal of angst."
People were, in extreme cases, going to pay day lenders to pay for funerals, she added.
"So on top of the grief, you've got guilt, because they want to do their best for the people they love and they can't afford it."
Scottish Social Justice Secretary Alex Neil said: "It is unacceptable that a bereaved family, trying to come to terms with the loss of a loved one, should go through the stress of worrying about how they can afford to pay for the funeral.
"There are too many examples of funerals being delayed and families facing uncertainty when they should have the space to grieve. Many end up with expensive credit card or payday loan debts, or need to borrow from friends or apply to charities to pay for the funeral. We do not want to see people spiralling into debt because of these costs.
"As a result of the Smith Commission, we will have powers over funeral payments, but it's clear that this is just only one part of the challenge of tackling funeral poverty.
"John Birrell's report will look at how the Scottish Government can take a more coordinated approach which will help bereaved families on low incomes organise a respectful funeral without taking on unsustainable debt."