Image caption Advisers such as Cecilia Torsney say that they never have been busier.

Hundreds of debt advisers have stopped taking on new cases because their funding is to be axed next month.

For the past five years, the £25m-a-year Financial Inclusion Fund has been paying for about 500 specialists in England and Wales to give free advice.

But the cash is due to run out in March and the government has said it will not renew the fund.

The news means that advisers face redundancy at a time when demand for their advice is forecast to grow.

The debt advisers affected have been sent redundancy letters and been told to stop taking on any new clients, other than those with the simplest problems.

The Money Advice Trust, a charity which promotes independent help for people with debt problems, forecasts that 200,000 extra requests for free debt advice are expected this year, taking the total to a record 1.6 million.

'Doesn't stack up'

Media playback is unsupported on your device Media caption Citizens Advice warns that the cut in funding will leave a gaping hole in provision

Citizens Advice says its operations are already under pressure because of the loss of funding from local authorities. It says this decision to end funding 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 frontline services in local communities doesn't seem to make sense," the organisation's director of policy, Teresa Perchard, told the BBC.

At the Mary Ward Legal Centre in Central London, 10 financial advisors have been sent redundancy notices as a result of the withdrawal of the fund.

"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," said Cecilia Torsney, one of those who has received the letter.

The situation is seen as a huge opportunity for widely criticised debt management companies, who charge fees.

The Office of Fair Trading is cracking down on these firms after finding that they were riddled with bad practice.

Although there is still free advice available from several bodies, including Citizens Advice, these specialist advisers are trained to deal with complex cases and to represent clients to their lenders.

A spokesman for the the Treasury, which decides on the funding, said a new web and phone based service would be introduced and would be able to refer cases to specialists.

"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," he added.