Many workers live life permanently in the red

Around 10 per cent of people are always in the red, while a further 12 per cent use their overdraft at least five times a year, according to financial website moneysupermarket.com

Overall, 38 per cent admit they have used their overdraft at least once during the past year.

But the figures are an improvement on when the same research was carried out 12 months ago, when 17 per cent of people said they were permanently overdrawn and 52 per cent had dipped into the red at least once during the previous year.

Kevin Mountford, head of banking at moneysupermarket. com, said: "Whilst it is encouraging to see less and less people reliant on their overdrafts, we should be concerned that there are still such a large number of people permanently overdrawn.

"With rising inflation, it is going to be difficult for many to break the habit of living in the red, and it may be that more people will fall back into this position as living costs increase."

Meanwhile, research from insurer Aviva painted a similarly gloomy picture of many people's finances.

The group found the average household would run out of money after just 14 days if one of its wage earners was unable to work due to illness or if they died.