According to the research, the cost of outgoings such as rent, mortgage payments, living costs and fuel bills means that UK adults face an average shortfall of £165 a month, with more than a quarter (26%) uncertain whether they can pay their bills on time.
It also uncovered that 70% of people are worried about their cashflow, with 25 to 34 year-olds being the most concerned - three quarters of people in this age group (74%) admit to having money worries.
As housing and living costs continue to increase, the research also highlights some of the risks people are taking as they forgo essential items to stay afloat, such as their home insurance.
According to the findings, more than a fifth of the population (22%) don't think having home contents insurance is important, although nearly 80% of people say they'd be unable to afford to replace expensive items without it.
And the research shows that one in 10 cash-strapped Brits (8%) even admit that they undervalued their home contents to keep insurance premiums down.
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. It's worrying to see that such a high proportion of people don't think having home insurance is important, as without it they could be left open to serious risk and further unaffordable expenditure in the long run."
The research was carried out to highlight the partnership between The Co-operative Insurance and Shelter, which is raising money for the charity's work to support people needing debt and housing advice. This winter, The Co-operative Insurance has donated £5 to Shelter for every new Co-operative Home Insurance policy, raising £250,000 to help support the important work that Shelter does with people struggling to keep a roof over their head.
Campbell Robb, chief executive of Shelter, 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.
"Every day Shelter's advice services are there helping the increasing numbers of people who are finding it difficult to manage their finances and keep a roof over their head. The support Co-operative Insurance provides through this partnership is vital in making sure we reach as many people in need as possible and we extremely grateful for their support."
