Groups have blamed “Government red tape” on the losses.

Top British charities providing critical services to tens of thousands of vulnerable people across the country have warned their fundraising efforts are being strangled by government red tape.

Concern has been raised as new figures reveal the scale of the impact of curbs imposed on charity lotteries.

The charities, many of them household names, have joined People’s Postcode Lottery in a plea for the UK Government to remove “pointless and outdated” limits on charity fundraising which are set to cost them a staggering £198 million over the next five years.

Removing the limits would release millions of pounds for hard-pressed charities. And it would cost the Treasury and the taxpayer nothing to implement it.

Charities affected include the Royal Voluntary Service, which could lose out on up to £5.3.

Catherine Johnstone CBE, chief executive of Royal Voluntary Service, said: “To think that Royal Voluntary Service, and the thousands of people we support, could be missing out on estimated funding of £5.3 million over the next five years, because of the cap, is agonising.

“This level of funding could support the charity to be there for the increasing number of people who turn to us for support as their lives, wellbeing and their health are impacted by the cost of living crisis.

“Removing the fundraising limits is an opportunity for the government to make a huge difference to numerous charities, which in turn will improve lives and communities nationwide. Royal Voluntary Service alone will be able to serve thousands more hot, wholesome lunches to isolated people in our lunch clubs, and to recruit, train and mobilise thousands of volunteers to give vital support to those who need it most.

“One of the charity’s core values which we operate by is that things are ‘better when simple’, and for me, that includes removing unnecessary red tape. I implore the government to not let the red tape of the lottery fundraising limits harm the potential of the sector, at a time when the nation is relying on it most.

“The support of the players of People’s Postcode Lottery has a monumental impact on the services that we deliver to support the health and wellbeing of some of the most vulnerable people in our communities.

“It’s thanks to players that Royal Voluntary Service is able to mobilise its volunteers to reach and support over 60,000 people face to face, and nearly 50,000 people virtually all over the UK.”

Other affected charities include Barnardo’s, which could lose out on up to £5.1m, and cancer charities Young Lives v Cancer and Maggie’s, which could each lose out on up to £4.3m.  

Maggie’s has 24 centres in the grounds of NHS hospitals across the UK and provides vital services to those whose lives have been affected by cancer.

Homelessness charities Crisis and Depaul UK could lose out on up to £5.3m and £4.9m respectively. 

Keep Britain Tidy could lose out on up to £1.7m and Magic Breakfast – which supports breakfast clubs in schools across the country – could lose out on up to £1m. 

Lindsey MacDonald, chief executive of Magic Breakfast, said: “A healthy and nutritious breakfast makes a meaningful difference to a hungry child’s ability to learn each day.

“A breakfast unlocks hours of learning and when considered as part of the school day, fuels the potential of that child and community. Magic Breakfast will lose out on £1 million due to current lottery limits, which equates to more than three and a half million breakfasts.

“I stand alongside other charity leaders, calling on government to lift the limits on charity lotteries so we don’t limit the potential of children and young people.”

In total more than 70 charities are affected.

Clara Govier, managing director of People’s Postcode Lottery said: “We want Ministers to be fully aware of the negative impact their current policy is having on charities and the communities and causes they serve.

“They must realise the huge opportunity for them to make a massive difference to these charities and at no cost to public finances. It is not even clear what the current policy is meant to achieve, and indeed it seems to be pointless. What is clear however is that it is negatively impacting on the finances of many charities.

“Charities and their beneficiaries across the country will increasingly be asking ‘Just why wouldn’t you do this?’”