Bereaved families are leaving the ashes of their loved ones behind in boxes in funeral homes and crematoria at a greater rate than ever before, according to NSW funeral directors and industry sources.

About 67 per cent of the 56,000 people who die in NSW are cremated, and only a third of them are "memorialised" at a cemetery, according to Crematoria and Cemeteries Agency NSW (CCA), the government body set up in 2014 to oversee the industry.

Its figures on the "disposition of ashes" (the volume of ashes scattered at a cemetery or interred) shows only 32.5 per cent are interred, for example in a niche wall, or scattered in a cemetery.

As a result, thousands of boxes of cremated remains are believed to be sitting uncollected and forgotten in funeral directors' offices and crematoria.

Many families choose to scatter cremated remains across favourite beaches, shoot them into space, or sprinkle them (often surreptitiously, as most councils require permission) on sporting fields and ovals, vineyards and backyards or just leave them in an urn on a mantelpiece.

At one large crematorium in Sydney, which handles 1200 people a year, a storage room contained about 800 boxes of remains.

Despite repeated efforts by staff to contact the families, some ashes date back to 2003.

A collection of smaller boxes on a shelf contained the cremated remains of infants, babies who died only a few days or weeks after birth. The uncollected ashes of one baby date back to June, 2004.

An executive who showed us the facility said the crematorium staff attempted to contact families to ask if they'd like the ashes or if they should be scattered on consecrated grounds, which is done once a month.

Andrew Crook, who owns The Little Funeral Company and previously worked for a large funeral company, makes a huge effort to return ashes to families after a cremation, often driving around Sydney with the ashes in the boot of his car only to be thwarted by families' lack of interest.

The trend reflects a breakdown in families, and the increasing number of people who live and die alone or are alienated from friends and community, he said.

"It is just really sad," Mr Crook said. "I have had to do funerals where there is no money, no family, and they are on their third or fourth wife, the kids don't talk to each other, and at the end of the day you are just left holding the wreckage of someone's life."

The chief executive of the Southern Metropolitan Cemeteries Trust, Graham Boyd, said sometimes families were too sad to collect the ashes. "One father told me why he did not collect his young boy's ashes because ... his grief was too great to face the reality that his young son had died."

Mr Boyd argues the rate of memorialisation is more than 8 per cent higher than reflected in the CCA's figures, and varies widely from cemetery to cemetery.

Mr Boyd said only small percentage of families didn't collect ashes. "Whenever we scatter or bury such ashes which have not been collected, we place rose petals with them and we, for that moment in time, become the deceased families," he said

He has written to the CCA to say these numbers don't include the number of ashes that were scattered on existing graves. For instance, about 250 ashes were placed in existing graves in a year when 3007 cremations had taken place at its crematoria at Woronora and the eastern suburbs It was common for families who chose to cremate a relative to dispose of these ashes in the grave of another family member who had been buried at the cemetery.

The practice of scattering ashes has grown so much - even among Catholics, who are strongly urged to opt for burial - that the Vatican last year issued guidelines saying ashes shouldn't be kept at home or divided among family members. It was not permitted to scatter ashes in the air, land or sea because it would give the appearance of "pantheism, naturalism or nihilism", the guidelines by the Congregation for the Faith said.

Many families are also opting for inexpensive no-attendance funerals. It is common for these ashes not to be collected.

While the number of deaths across Australia will double to 300,000 by 2051, IbisWorld forecast that funeral and cremation revenues would grow slowly, at about 2.5 per cent a year. "Consumers have been increasingly choosing cremations or basic funeral packages over the more expensive burial options," it said.

About two thirds of people in NSW choose cremation, although the rate varies across NSW. Photo: Cemeteries and Crematoria NSW

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