by business editor Trevor Sturgess

Pessimism about the financial prospects for households is at record levels, according to a survey.

As hard-pressed consumers are bracing themselves for continued pressure in the coming year, the Markit Household Finance Survey found there had been a steep deterioration in household finance, that the cost of living had risen at a record rate and that debt levels had increased.

Job security was a major concern, with public sector workers worried more than others.

About 36 per cent of households registered a worsening of their current finances, against just seven per cent that noted an improvement.

Public sector workers were more downbeat about their finances than their private sector counterparts.

The index measuring households' outlook fell to its lowest point since the data was first compiled in early 2009.

Negative sentiment about the 12-month outlook was most prominent among public sector workers, with pessimism the strongest since the first collection of data.

Confidence also reached a near record low among private sector employees.

Alex Hamilton, Markit economist, said the survey signalled a further sharp squeeze on already hard-pressed household finances.

"UK households continue to see their purchasing power being eroded by the rising cost of everyday living, which rose at a record pace in April.

"Meanwhile, worries about job security intensified, with employees indicating their greatest concerns in 26 months."