Lenders must warn indebted borrowers if they are in danger of getting into financial difficulties, under changes to banking rules.

New guidelines designed to avert a rise in the number of home repossessions will force banks to offer at-risk customers alternative debt repayment plans, as well as contact details for free money advice providers.

The change to the Banking Code, which takes effect in March, transfers responsibility for dealing with debt from borrowers to lenders. Under the existing code, it is the customer’s responsibility to contact the bank if they think they could slip into arrears. Although borrowers must still contact their banks if they are in trouble, the move should mean that severe difficulties are avoided.

The revised code instructs banks to acknowledge that borrowers should be asked to pay off debt from credit cards, personal loans and mortgages only if they can still afford to pay for “priority” household bills such as heating and electricity.

The move comes as thousands of homeowners face the threat of repossession over coming months. The Council of Mortgage Lenders predicts that the number of repossessions will rise by 50 per cent in 2008, from 30,000 to 45,000 as the credit crunch and rises in monthly mortgage costs take their toll on household budgets.

Accountants are also predicting a record number of bankruptcies and insolvencies this year, which banks are keen to avoid. About 120,000 people are expected to file for insolvency in 2008, up from 110,000.

However, debt charities said that the change to the code did not go far enough. Chris Tapp, the director of Credit Action, the debt advice charity, said: “The change to the code is a step forward, but it is not the kind of change we need. If what we want is responsible lending in the first place, this does not go far enough.”

Teresa Perchard, the director of public policy at the Citizens Advice Bureau, said: “While these and other changes represent progress, we are disappointed that the opportunity has not been taken to end the practices of unsolicited increases in credit limits and unsolicited issuing of credit card cheques.”

The British Bankers’ Association (BBA), the industry body that oversees the Banking Code, said that borrowers will still be more likely to reach a favourable repayment agreement if they cooperate with the lender.

Brian Capon, of the BBA, said: “Where the customer contacts the bank and is actively cooperating with it, the bank will be obliged under the code to consider granting concessions on interest, fees and charges. This will be decided upon a case-by-case basis, but one of the elements will be the extent to which the customer is working with the bank to resolve the problem.”

A spokesman for Halifax said: “We always take a proactive approach. When a payment is missed we will contact the borrower straight away via letter to discuss things, offer support, and agree a way forward.”

The change to the code came after an independent review in November stipulated that there should be “more help for customers who may be heading towards financial difficulties”.

The BBA said that borrowers should still contact their bank as early as possible if they face payment difficulties.

Mr Capon said: “It was always best practice for banks to get in touch if they noticed someone was struggling. Now this is in the code, although it is still best to get in touch with your bank straight away if you are struggling.”