It suggests that the average cost of a funeral in Scotland is £3,537.
Research by Royal London revealed that the average cost of a burial is £3,993 and £3,081 for a cremation.
Charges vary in different parts of Scotland.
Rev Bryan Kerr, the Church of Scotland's representative on the Scottish Working Group on Funeral Poverty, said: "We are concerned with the findings of this report which states that funeral poverty in the UK has increased by 12 percent with the average cost of a funeral in Scotland standing at £3,537.
"This is having a disproportionate impact on low income families - no one should be plunged into debt in order to bury or cremate a loved one. It can create huge stress and adversely affect one's ability to grieve and move forward.
"The Church welcomes the imminent introduction of the Scottish Funeral Expense Assistance which will provide help towards burial and cremation costs for individuals on lower incomes."
The report states that approximately 40 percent more people will be eligible for this payment than were for the Department of Work and Pensions funeral payment.
Rev Kerr said: "Whilst this is good news, people on low incomes will still have a significant shortfall to address. We continue to call on the Scottish Government to ensure that all families have the ability to say goodbye to their loved one without being burdened with debt.
The report highlights a 'minister's fee' but this does not apply to Church of Scotland ministers who do not charge a fee to conduct funeral services.
Stay up to date with the latest news stories from a Christian perspective. Sign up to our daily newsletter and receive more stories like this straight to your inbox every morning.