In a heavily populated world of finite resources we have long become accustomed to the idea that the cost of living will inevitably rise. Which makes it all the more depressing to hear that dying has also become an increasingly expensive affair.

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Thanks to a lack of competition amongst funeral homes and a series of anti-pollution measures that crematoria have had to install, the average price of a funeral in Britain has risen by 42 per cent over the past five years – considerably beyond the standard rate of inflation.

The total average cost of saying goodbye to a loved one – including legal costs, the price of the funeral and additional extras such as flowers – has now crept up to £7,098. And researchers estimate that costs will continue to rise by a third over the next half decade leaving many low income families struggling to find money during a time of intense bereavement.

Whilst the cost of a standard funeral is now £2,733 (in London the figure jumps to £4,600), a whole host of "hidden" costs such as venue hire, catering and the cost of the coffin or pall bearers often pushes the overall price far beyond people’s initial expectations.

The funeral industry, which was worth £1.3bn in Britain in 2006, says the rising costs of burial plots and filters that stop dangerous mercury compounds leaking out from crematoria, have led to the above inflation rises. But others believe the industry is simply more able to cash in on customers at a difficult time in their lives when they are often less likely to haggle or shop around for a better deal.

Paul Dwyer, who has worked a consultant on the funeral industry for 25 years, said that although satisfaction rates were high there was evidence that the unique circumstances of its work allowed prices to rise more rapidly than in other services.

"A funeral is a purchase that is often made suddenly – it is very much a distress purchase," he said. "The overwhelming majority of people just go to one funeral director and take the price they are given. People are uncomfortable with shopping around. Customer surveys show that the industry does a fine job - 75 per cent rate the service at eight out of ten or above – but there is just not the commercial pressure, which in turn means that prices creep up."

And while mercury filters have made cremations more expensive to carry out, some have questioned whether such a steep rise can solely be blamed on third party costs. One industry source said: "There is no doubt that those extra costs, such as crematoria fees or burial plots have risen but if you look at it in detail, they are adding no more than 10 or 15 per cent to the overall cost of a funeral. It is difficult to square that with a 42 per cent rise in five years."

Jeremy Smith, a 49-year-old funeral director who runs Green Endings in Tufnel Park, which specialises in environmentally friendly ceremonies, says there are a number of ways to cut down the overall cost of a funeral.

"I find families are becoming much more willing to talk about money and reduce the overall cost of a funeral," he said. "When people don’t have a lot of cash to spare we try to help them save money by suggesting things like re-usable coffins, using friends or family to conduct a service rather than a paid professional, and booking early morning slots at crematoria which are often much cheaper."

But Denise Kantor, from Cruse Bereavement, the country’s largest bereavement charity, said people should not overly worry about whether they can afford a funeral. "Most funeral directors will bend over backwards to accommodate your needs because they understand this is not shopping in M&S, they're dealing with real and raw emotions," she said.