British Columbians’ confidence in personal finances, debt repayment abilities plummets amid pandemic fatigue and uncertainty

• Forty-six percent are not confident they can cover their living expenses this year (+10pts).
• Nearly half report they are $200 away or less from not being able to meet all their financial obligations at month-end (45%, +7pts).
• Four in 10 say they are concerned about their current level of debt (42%, +3pts).
• Fewer than three in 10 (26%, -6pts) are confident in their ability to cope with unexpected events without increasing their debt burden.
• Two in 10 believe their current debt situation is worse than it was a year ago (21%, +6pts).

VANCOUVER, BC – January 17, 2022 – British Columbians’ confidence in their personal finances has plummeted as uncertainty and pandemic fatigue continue to build amid the spread of the Omicron COVID-19 variant, according to the latest MNP Consumer Debt Index which is conducted quarterly by Ipsos. Compared to last quarter, far fewer British Columbians are confident they can comfortably cover their living expenses in the next year (54%, -10pts) and more say they are concerned about their current level of debt (42%, +3pts).

“British Columbians are becoming increasingly worried about their household debt as we near two years into the pandemic,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “Financial optimism typically takes a hit as the holiday bills arrive, but the added pressures from the Omicron variant and resulting pandemic fatigue, as well as rising inflation and the potential for interest rate increases have likely led British Columbians to feel more insecure about their finances.”

As coronavirus uncertainty continues, and with so many British Columbians feeling financial anxiety, far more are uneasy when it comes to financial preparedness for unexpected expenses. Fewer than three in 10 (26%, -6pts) are confident in their ability to cope with life-changing events without increasing their debt burden. British Columbians are significantly less confident in their ability to handle a change in their relationship status (26%, -6pts), the death of an immediate family member (19%, -3pts), or pay for either their own or someone else’s education (17%, -6pts). Three in 10 (28%, +2pts) are not confident they could cover an unexpected car repair, and around the same number (31%, -1pt) doubt they could cope with having an illness that renders them unable to work for three months. One in three (33%, -4pts) have concerns about coping with a loss of employment or change in wage or seasonal work.

“It’s getting harder to see the light at the end of the tunnel for B.C. households whose finances have been stretched thin during the pandemic. Many could find themselves vulnerable to any change to their budget as we weather another wave of business closures, reduced working hours or job losses, and COVID-related health concerns. Unexpected expenses are one of the biggest catalysts of financial turmoil,” says Paul.

Nearly half (45%) of British Columbians report they’re $200 away or less from not being able to meet all their financial obligations at month-end, up a significant seven points from last quarter. This includes nearly three in 10 (30%, +3pts) who say they already don’t make enough to cover their bills and debt payments. Making matters worse, three in 10 (31%, +3pts) say they’re finding it even harder to pay down debt, and two in 10 (21% +3pts) say it’s become much less affordable to set aside money for savings.

“The rising cost of living may cause people to resort to credit to make ends meet and afford basic necessities — particularly for the growing number of British Columbians who say they’re either close to or already unable to keep up with their debt obligations,” says Paul.

Compared to the same time last year, more British Columbians are engaging in what Paul and other debt professionals consider bad financial habits, such as paying only the minimum balance on their credit card (22%, +2pts) or borrowing money they can’t afford to pay back quickly (12%, +1pt). Compared to other provinces, British Columbians are the most likely to admit they were lured in by deals such as Black Friday offers this year (15%), up a staggering eight points since the same time last year. Although down five points since last quarter, six in 10 (57%, -5pts) British Columbians still point to low interest rates as the catalyst for buying things they might otherwise not be able to afford.

With concerns over inflation and the cost of living at the front of many British Columbians’ minds, they are the most likely (21%) compared to other provinces to believe their debt situation is worse than a year ago, a striking six-point increase since September. Nearly half (47%, +6pts) of British Columbians say they regret the amount of debt they’ve taken on. When looking five years into the future, British Columbians appear to be the most apprehensive about the road ahead, with two in 10 (18%) believing their debt situation will worsen — an increase of seven points.

“Interest rates remained low through 2021 and we saw British Columbians taking advantage of those rock-bottom rates to make purchases that may not normally have been within their budget. Now there is talk of looming interest rate hikes which could make those purchases increasingly unaffordable. Add in the pressure of holiday bills coming due and it’s easy to see how people could end up in over their heads," explains Paul. “It’s important to be on the lookout for early warning signs of financial trouble. Those who identify the signs and seek the help of a debt professional right away, rather than piling on more debt, will have peace of mind in knowing they’ve made the first step towards financial stability.”

Licensed Insolvency Trustees are the only federally regulated debt professionals who can offer guidance regarding all the debt-relief options available to British Columbians. They provide customized, unbiased advice to help individuals make informed choices to deal with debt responsibly.

“People often feel completely isolated while struggling to get their debt under control. Many don’t realize help is out there; they don’t have to go through it alone. Speaking with a professional can help alleviate the feelings of stress and anxiety that have built up along with the mounting debt, creditor or collection calls, tax issues, and wage garnishments. The sooner you seek help at the onset of trouble, even an anticipated missed payment, the sooner you will be on your way to financial stability once again,” says Paul.

British Columbians can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, they provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements, and Bankruptcy.

About MNP LTD

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 240 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 use our free Do it Yourself (DIY) debt assessment tools. For regular, bite-sized insights about debt and personal finances, subscribe to the MNP 3 Minute Debt Break Podcast.

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, 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.

Now in its nineteenth wave, the Index has plummeted seven points since last quarter to 88 points, the lowest reading since its inception in June 2017. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the nineteenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between December 1-7, 2021. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. 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 adults 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.

A summary of some of the national data is available by request.