There is a persistent red dot/light on my Iphone 5 at the top of the device, next to the speaker. What is this? And why can I see it?!

This red light has been present for a long time now and I can see it clearly at night and vaguely in the morning. It is actually quite annoying now. Surely I can't be paying so much for a phone that is going to do that? Can you guys please tell me what this is and why it's happening?

What you are seeing is the proximity sensor.
Try basic troubleshooting from the User's Guide which is reset, restart, restore.

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