British Columbians Increasingly Pessimistic About Their Ability To Absorb Higher Interest Rates And Cover Monthly Bills
2018-01-15 minute read
According to a recent Ipsos poll conducted by MNP LTD., British Columbians are increasingly worried about their ability to repay their debts. Since interest rates first rose in July, households across the province have noticed their budgets tightening as they struggle to keep up with expenses and manage other rising costs. Rising two percent since September, one-quarter (25%) of British Columbians now say they are unable to cover their monthly bills and debt repayments. At the same time, four in ten (41%) say they are $200 or less from not being able to meet their monthly financial obligations.
Disposable income has also declined noticeably over the previous two Consumer Debt Index surveys, with the average British Columbian noting a 17 percent drop since June. Decreasing from $906, households are now left with $802 to cover any irregular or unplanned costs. This has led one in three (36%) to express concern if interest rates go up much further they may find themselves in financial trouble and one-quarter (26%) to worry it may move them towards bankruptcy; a three percent increase since September.
While three-quarters (77%) of British Columbians resolve to be more careful with how they spend their money, almost half (49%) still anticipate going further into debt just to cover basic expenses over the next year. The contrast between the two figures illustrates a concerning picture – people see the trouble they're headed for but aren't financially prepared to make the necessary changes to avoid it. Debt is still a critical element of making the budget work and many are stuck on the minimum payment treadmill.
Reflecting on their situations, one in three (33%) British Columbians say they are concerned about their current debt situation and two in five (39%) regret how much debt they've taken on. Most concerning is that almost six in ten (59%) now have doubts about their ability to retire debt free. Up 10 percent since September and 13 percent since June, that is the largest increase of any province.
This all indicates rising debt costs are ramping up the financial pressure across the province. Many people took advantage of rock bottom interest rates for everything from houses and cars to everyday purchases while few put money away for emergencies. If things don't change drastically, thousands of British Columbians could be on the verge of a significant crisis over the coming year ahead.
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 /relief among Canadians. Visit www.MNPdebt.ca/CDI to learn more.
The latest Index data was compiled by Ipsos on behalf of MNP LTD between December 8th to December 13th, 2017. For this survey, a sample of 2,001 Canadians from the Ipsos I-Say panel was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +/- 2.5 percentage points, 19 times out of 20, of what the results would have been had all Canadian adults been polled. Credibility intervals are wider among subsets of the population. This represents the third wave of the MNP Debt Index.
