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More than one in five 25-34 year olds spend more than 60 per cent of their income the very day it enters their account, according to figures from accounting firm KPMG.

And three per cent of these so-called millennials even find themselves in the red by the end of payday.

The UK wide survey conducted by YouGov for KPMG found 42 per cent of millennials listed debt - unsecured loans and credit card payments - as a significant payday outgoing.

This tallies with the recent Financial Conduct Authority study which

found 13 per cent of 25-34 year olds are in financial difficulty, having missed paying domestic bills or credit payments in three or more of the last six months.

By comparison, just 13 per cent of the total population spend 60-100 plus per cent of their income on payday, and just eight per cent of those over 55.

Across all age categories, housing, utility bills and loans were the most common pay day expenses.

Catherine Burnet, head of Financial Services and senior partner for KPMG

in Scotland, said: “With so many people in Scotland spending so much of their income on payday it’s little surprise that people are forced to rely on credit to get through the rest of the month, let alone to cover unexpected expenses, like a car breaking down.

“Many people deal with this by slipping in and out of their overdrafts, a

habit that can easily result in exceeding your overdraft limit.

“According to the FCA 11 per cent have exceeded their overdraft limit or used an unauthorised overdraft in the last year. Not only can this be costly, it also means they are I likely to miss out on financial lifelines that accompany most other forms of credit.

“Firms will recognise a person taking out multiple loans or missing repayments as being in trouble and offer debt support as a result, but people can depend on their overdrafts over a long period and go

unnoticed.

“Whilst a lot of attention is being paid to the cost of overdrafts, we also need to consider what more can be done to help those routinely relying on overdrafts to recognise and reconsider their financial habits.”

Yael Selfin, Chief Economist at KPMG, said: “With the Bank of England looking to increase interest rates further, the cost of paying off debt could rise, while at the same time a slowing economic growth momentum and uncertainties around Brexit may make it harder for households to access affordable financing, putting vulnerable groups under pressure.

“With UK wages expected to rise only marginally over the medium term, many will not have sufficient buffers to cope with tightening credit conditions.”