A £190m fund which provides hard-up families with free debt advice, low cost loans and access to bank accounts is likely to be scrapped this year as the government continues its radical public spending cuts.

Ministers have failed to offer any reassurances that various financial initiatives to help low-income households, such as The Financial Inclusion Fund, The Growth Fund and Saving Gateway, will be continued beyond the end of March.

These schemes have provided thousands of families with easy access to affordable credit and financial help, encouraging people to develop sensible money-handling skills and saving habits.

The National Housing Federation, which represents England's housing associations, fears that the axing of these funds will have a widespread impact and could ultimately leave many people across the country at risk of falling into the hands of predatory loan sharks and deepening levels of debt.

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The initiatives were launched to tackle the 'financially excluded', meaning people who had no access to Money Advice, no bank account, no assets, no insurance, no affordable credit or no savings.

The Financial Inclusion Fund specifically targeted zones which have been neglected by private banking firms, taking free face-to-face money advice to those who needed it most.

The Growth Fund aimed to increase the availability of personal loans by working with not-for-profit lenders to provide safe and affordable credit. This fund has provided 271,085 loans, and has also seen 145,841 Growth Fund borrowers open bank or savings accounts.

Other axed initiatives include the Saving Gateway scheme, designed to help lower-income families develop a saving habit.

The cuts come at a time when financial support for low income families is more important than ever as jobs dry up and benefit payments are reduced.

The Federation is calling for banks and the government to better provide for the financially vulnerable.

Federation Chief Executive David Orr said: "These schemes have provided vulnerable families with a financial lifeline over recent years by offering affordable loans, debt advice and banks accounts.

"If these services disappear, there's a very real danger that loan sharks and doorstep lenders will fill the void and suck people into chronic levels of debt and hardship.

"The banks and government have a moral responsibility to help families in deprived communities access the financial services many of us take for granted every day."

(CD/GK)