Five hundred specialist debt advisers have stopped taking on new cases because their funding will soon be stopped, it was reported today.
The Financial Inclusion Fund has been paying for the specialists in England and Wales to give free advice for the past five years.
But the BBC said the funding was due to run out in March and advisers facing redundancy had been told to stop taking on new clients other than those with the simplest problems.
The news comes with demand for debt advice set to grow as tough economic conditions continue.
Citizens Advice director of policy Teresa Perchard told the BBC the charity's operations were already under pressure because of the loss of funding from local authorities.
She said the decision to end funding for debt advisers could not have come at a worse time.
"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 front-line services in local communities doesn't seem to make sense," she said.
A Treasury spokesman told the BBC a new web and phone based service would be introduced and would be able to refer cases to specialists.
He said: "We want to make sure that individuals facing financial difficulty can get advice early, rather than wait until their problems become much more difficult to resolve."Reuse content