Nearly one in three Britons have to spend more money each month than they have coming in – a figure likely to alarm many landlords with buy to let insurance.

Research by The Co-operative Insurance and housing and homelessness charity Shelter found that the cost of outgoings such as rent, mortgage payments, living costs and fuel bills meant UK adults faced an average shortfall of £165 a month, with more than a quarter (26%) uncertain whether they could pay their bills on time.

Lee Mooney, Head of Home Insurance at The Co-operative Insurance, said: “The results of our research with Shelter highlight the extent to which people are now feeling the pinch and show that a large number of people are being forced to spend more money than they can afford.

“Although times are tight and the vast majority of people don’t have spare cash, it’s important people prioritise what they need above what they want in the year ahead.”

Shelter Chief Executive Campbell Robb said: “It’s shocking to see how many people simply don’t have enough money to make ends meet and shows just how hard people are finding it in this tough economic climate.

“Recent research from Shelter showed that over two million people are now turning to their credit cards to pay their rent or mortgage, showing the desperate measures people are being forced to take because their incomes cannot keep up with the increasing cost of living.”

For landlords these figures raise the increased prospect of tenants defaulting on their rent.

To avoid ending up out of pocket themselves as a result of this, landlords are advised to consider taking out rent guarantee insurance to give better peace of mind in the current economic climate.