Funding for free debt advisers will not be renewed.
Debt advice requests could reach 1.6 million this year.
Debtors could find it harder to get the help they need from experts as hundreds of debt advisers have stopped taking cases due to lack of funding.
Since 2005 about 500 UK debt specialists have received £25 million of funding a year to provide free advice to people struggling with debt through the Financial Inclusion Fund. However, the scheme will not be renewed by the government this year, which means many advisers will face redundancy and thousands of Britons may be unable to get hold of the help they need.
The move comes at a time when unemployment is set to rise and the future of the economy remains increasingly uncertain. The Money Advice Trust charity has predicted that 200,000 more requests for free debt advice will be made this year.
Director of policy at Citizens Advice Teresa Perchard said: “It just doesn’t stack up, unemployment is rising, the economy is in a difficult situation and there is an increasing demand for debt advice and at this time to lose frontline services in local communities doesn’t seem to make sense”.
The scrapping of the fund has meant that many debt advisers have received redundancy notice letters from their employers.
Cecilia Torsney who works at Mary Ward Legal Centre in Central London said: “Not only am I going to lose my job but the service is going to go, the service that sees thousands queuing outside the door on busy days, appointments booked up weeks in advance and that’s all going to be lost”.
A Treasury spokesman said a new web and phone based service will be introduced so that people dealing with debt can get advice as early as possible before their problems become harder to resolve.