SCOTLAND'S citizens advice service has said it is "bracing itself" for a flood of debt cases after researchers predicted a 21% increase in people seeking help for money problems.

Money Advice Trust said 78,000 people currently seek advice on their money problems from free debt services, but research carried out by the University of Nottingham suggested another 16,000 would be added to that number by the end of next year.

The prediction was made based on academic research into the impact of public sector unemployment on Scotland.

Citizens Advice Scotland (CAS) said it dealt with 15,491 new debt cases last year, with the average amount owned reaching £14,000. It also warned that future cuts to funding could result in an increase in insolvency cases.

Susan McPhee, head of policy at CAS, said: "We are already struggling with significant cuts, and many of our local offices are severely over-stretched.

"If debt cases are to rise by this extent, you need to consider the consequences of cutting our funding even further. Because if we are not there to help these people, you will see an increase in cases of insolvency, bankruptcy, rent and mortgage arrears, homelessness and ill health – all of which will be more expensive to the public purse than the cost of properly funding our expert service now.

"It is crazy to be cutting CAS funding just as demand is set to rise so massively."