Albertans Are The Most Concerned About Debt And Personal Finances Compared To Other Province

• Albertans are the most concerned about their current level of debt, the most likely to regret the amount of debt they have taken on and the most likely to be worried about their ability to repay debts compared to other provinces.
• Confidence in ability to absorb an interest rate increase has reached a historic low: nearly six in ten Albertans say they are concerned about the impact of rising interest rates on their financial situation, a higher proportion than any other province.

CALGARY, AB – Albertans are feeling worse about their consumer debt and personal finances than other province, according to the latest MNP Consumer Debt Index, a quarterly survey conducted by Ipsos on behalf of MNP LTD. Since September 2018, Albertans’ perception of their debt situation has been on a gradual decline. Compared to other provinces, Albertans are the most likely to be worried about their ability to repay debts (64%; +1pt), the most concerned (48%; +5pts) about their current level of debt and the most likely to regret the amount of debt they have taken on in their life (51%; +1pt). They are also most likely to say an interest rate increase could move them towards bankruptcy (45%; -3pts).

Consumer insolvencies are up 25.3 per cent in Alberta compared to the same time last year, according to the latest data from the Office of the Superintendent of Bankruptcy.

Nearly half (48%) of Albertans say they are already hovering close to financial insolvency at the end of the month, just $200 or less away from not being able to pay their bills. This includes one in four (27%) who say they have no wiggle room at month-end, as they already don’t make enough to cover their bills and debt payments.

“With such little breathing room in the household budget, it becomes very easy to slip into an endless cycle of debt that is impossible to get out of,” says Carson. “This isn’t simply a matter of people living beyond their means. Many households are already at the point where they are borrowing to make ends meet.”

While there may be red flags about where the economy and interest rates are heading, that has not stopped Albertans from continuing to borrow. Significantly more Albertans report taking on consumer debt compared to this time last year; over nearly six in ten (66%) say they have, up ten points. What’s more, it seems many may continue to borrow, with half (51%; -4pts) indicating they won’t be able to cover all living and family expenses in the next 12 months without taking on more debt.

Even as the Bank of Canada holding interest rates steady as of late, concerns over interest rates in Alberta have continued to grow since December. Nearly six in ten (57%; +2pts) Albertans say they are concerned about the impact of rising interest rates on their financial situation, a higher proportion than any other province.

 “For many Albertans, paying down debt or saving for the future is seen as more of a luxury. Living on credit has become the only way to make some household budgets work and a whole industry has grown up around making that feasible, from payday lenders to credit card companies, to buy-now-pay-later retail offers,” says Carson.

Despite the debt anxiety that many are feeling, Albertans are somewhat optimistic about their financial future, as a year from now, a quarter (25%; +0pts) expect their debt situation to improve, and five years from now, more than one-third (36%) believe their situation will improve.

“Getting out of debt is possible — even if you have no income or assets — but the longer people wait to seek help, the worse the situation. The first step for anyone struggling is to get a clear picture of their debts and to devise a plan. Doing this on your own can be challenging, so it is important to seek advice from a professional,” she says. 

To learn more about the survey and how MNP can help you manage your debt challenges, contact Donna  Carson CIRP, LIT, CPA, CGA, Senior Vice-President, MNP Ltd., at (Toll Free) 403.537.7657 or donna.carson@mnp.ca

About MNP Debt

MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 230 Canadian offices from coast-to-coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or get a free checkup for your debt health using the MNP Debt Scale.

About the MNP Consumer Debt Index

The MNP Consumer Debt Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, follow a budget, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure or relief among Canadians. Visit MNPdebt.ca/CDI to learn more.

The latest Index data was compiled by Ipsos on behalf of MNP LTD between March 13 and March 24, 2019. For this survey, a sample of 2,070 was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.