The Diocese of Lichfield, which co-ordinates over 8,000 annually says it commissioned the study because it wanted help people avoid people being forced to use payday lenders to cover funeral costs.
Revd David Primrose, social responsibility officer, Lichfield Diocese, who's leading the inquiry told Premier's News Hour that he hopes the Church of England will adopt some of the report's recommendations when its presented at a Church conference on funerals next Summer, he said: "We've been well aware of this as a growing problem.
"Growing problem because of the austerity around, growing problem because of the rise of funeral costs and so we and many other people are beginning to see what churches can practically do to help people."
Yesterday MPs were told families are being forced to sell possessions and take on debt to pay for funerals.
According to the Royal London insurance company 100,000 of the 500,000 families bereaved each year struggled to afford the cost of a funeral with debt averaging £1,300.
The Labour MP for South Shields, Emma Lewell-Buck, told the Commons that some people would rather bury family in their garden, than rely on government help.
She said: "One woman from my area approached the Citizens Advice Bureau with unmanageable debts. She had been unable to get the money together to pay for a headstone for her brother's grave. She ended up applying for a payday loan and the cost of repaying this debt had quickly got out of control. Sadly her story is not an isolated one.
"As well as rising debts, we're also seeing people turn to alternatives to the traditional funeral. Some are holding do-it-yourself funerals and even having to bury their relatives in their back garden.
"A number of companies are offering cut-price funerals including direct cremations that have no formal service attached to them. Increasingly, bereaved individuals who simply cannot afford a formal service are faced with having to opt for a public health funeral - or what used to be referred to as pauper's funerals.
"When nobody else is able to take responsibility for handling a person's remains, the local authority ends up having to step in. People have no control over this service and of course there is a cost to the local authority as well."
Revd David Primrose, Lichfield Diocese:
