The Work and Pensions Committee has launched an inquiry into funeral poverty and the benefits available to people who lose someone they were financially dependent on.
A recent FOI request by BBC local radio showed that the cost to local councils of so-called "paupers' funerals" has risen almost 30% to £1.7m in the past four years.
The number of public health funerals, which are carried out by local authorities for people who die alone or without relatives able to pay, has also risen by 11%.
Committee Members heard from constituents who were denied their relatives' ashes because they were unable to pay for the funeral.
The government currently provides Social Fund payments to help people unable to pay for funerals, but these are paid in retrospect and do not necessarily cover the full costs.
In addition, the Committee identified discrepancies between the different benefits available.
Eligible people can currently receive a Bereavement Allowance for up to 52 weeks from the date their husband, wife or civil partner died.
However, The Widowed Parents Allowance, to help a parent left to raise a child or children alone, is only available to parents who were married.
People may be unaware that bereavement support is available, the Committee also said.
In 2017, the government will oversee a major reform to bereavement benefits by introducing the Bereavement Support Payment.
In the meantime, The Work and Pensions Committee has invited written submissions on the policies and processes which relate to the Social Funeral Fund Payment, Bereavement Payment, Bereavement Allowance and Widowed Parents Allowance.
The deadline for written submissions is 5 January 2016.
Emma Lewell-Buck MP, Committee Member, said:"Losing a loved one is one of the most difficult experiences we face in our lives. As the costs of funerals have risen out of pace with financial support, more and more people are faced with the prospect of funeral poverty.
"Over 100,000 people are living with average funeral debt of £1,318. The Committee will be looking at what can be done to better support people at times when they are particularly vulnerable."
Simon Cox, proposition lead (protection) at Royal London said:"The average cost of a funeral has risen above inflation for decades and now stands at £3,700; funeral inflation is leaving more than one in ten people with an average debt of £1,318 following a funeral.
"The Social Fund Funeral Payment which helps contribute towards the cost of a funeral is incredibly important but increasingly inadequate with a process that is slow, complex and fundamentally flawed. It offers little comfort and may, in fact, simply lead UK citizens into debt. The average award is £1,375 which falls well short of the average cost of £3,700 and this gap looks set to continue as awards are growing at a much slower rate than costs.
"In this day and age it is shocking that financially vulnerable people are treated in this way at such a difficult time in their lives."
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