Family Action is one charity offering welfare grants to low-income families with multiple problems for one-off expenses, such as broken cookers, fridges or new school uniforms.
But chief executive Helen Dent told CYP Now it has been forced to restrict available funds this year and change its priorities for who is eligible for a grant.
Dent said the charity will be about £200,000 worse off this year compared to last year. She added that interest rates have dropped so much that the charitable trusts that fund the grant programme are not getting any return on their investments.
"The average grant is £200, which means the charity will serve about a thousand fewer families this year. Under our new criteria, families with disabled children and asylum-seekers looking to learn English will be less likely to receive funds," she said.
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