Tax credit payments will continue to hamper consumer efforts to pay off debt or make savings, according to Citizens Advice.

The organisation said that efforts by the government to recoup overpayments could seriously damage families' ability to cope with debts or generate a sustainable income.

Citizens Advice argues that the administrative errors that led to people being given more money than was intended should not result in heavy penalties.

Citing instances in which "unacceptable levels of official error" have occurred or where updated information has not been processed, the charity said that the government must do more to ensure the problems are not exacerbated.

While acknowledging the government's move to limit the cuts that can be made to payments so as to avoid huge repayments, there was concern that this move remained some way off.

Citizens Advice social policy officer Katie Lane said: "The changes announced for the end of this year are welcome, but challenging the recovery of overpayments must be made easier and a statutory right of appeal needs to be introduced. Recovery should be delayed at least until people have been notified of the reason for overpayment, and of their right to dispute and appeal it."

She added: "The quality of administration including all communications need to be significantly improved, so that people understand their entitlement, and understand the responsibilities the system places on them."

Last year Citizens Advice says its bureaux offered advice on around 150,000 tax credit problems.