Canadians Significantly More Worried About Debt, Interest Rates and Personal Finances Compared to September

According to a recent Ipsos poll conducted by MNP LTD., a growing number of Canadians are inching closer to insolvency – with the proportion who are $200 or less from being able to pay their bills each month (46%) rising six points since September.

Three in ten now say they don’t earn enough to cover their bills and debt payments – a seven percent increase over the same period – and nearly half (45%) say they will need to go further into debt over the next year just to pay for their living and family expenses. Fewer than four in 10 say they’re confident they could cope financially with an unexpected or life-changing event.

Collectively, the data underscores a growing concern that unsustainable debt in a climate of increased interest rates is stretching Canadians’ budgets to the limit. With higher debt-servicing costs adding to household expenses which were already tight to begin with, there’s little left over to address the principal – let alone set anything aside for savings. These effects continue to become more pronounced, with more than half of Canadians (51%) saying they’ve felt the pinch of higher rates – an increase of six points since September – leading to a rise in the number who are both concerned about their current level of debt (41%) and regretful about the amount of debt they’ve taken on (43%).

People across the country are also fearful about the lasting impacts of higher interest rates, with 51 percent concerned it could negatively affect their financial situation – and close to six in ten (57%, +5%) worrying it could affect their ability to repay debts. Half (50%, +5%) admit further increases could put them in financial jeopardy, while nearly two in five (39%, +5%) say that could push them toward bankruptcy.

Supporting these findings on the ground, MNP offices across Canada recently experienced the busiest fall season on record – which indicates people are not only feeling pressured by their debt, but actively searching for a way out of it. However, many more continue to suffer in silence, either unaware of the help available or afraid to reach out.

It’s important for people to be aware there are systems in place to help provide stability and peace of mind to severely indebted Canadians. Seeking help from a Licensed Insolvency Trustee is, in many cases, the best route to get the relief and financial fresh start they deserve.

Click here to view our digital infographic and learn more insights from this quarter’s MNP Consumer Debt Index.

Other MNP Consumer Index highlights include:

• Regionally, more Canadians across the country, with the exception of Atlantic Canadians, have seen an increase in the proportion of residents that are within $200 or less of financial insolvency. In particular, residents of Saskatchewan and Manitoba (56%; +8pts) are the most likely to be financially insolvent, followed by Alberta (48%; +8pts), British Columbia (41%; +6pts), Ontario (46%; +5pts), Quebec (46%; +5pts) and Atlantic Canada (45%; -4pts).
• Less than four in ten Canadians say they are confident in their ability to cope financially if an unexpected life-changing event were to occur, including: a change in relationship status (36%), having an illness and being unable to work for three months (33%), an unexpected auto repair (31%), loss of employment (30%), a death of an immediate family member (30%) or paying for own or someone else’s education (29%).
• A year from now, nearly four in ten (36%) Canadians expect their debt situation to improve, whereas nearly half (47%) are counting on the future for improvement, indicating they expect their debt situation to get better five years from now. Though, regardless of the amount of time allotted, net positivity has significantly decreased since September, indicating Canadians are becoming less optimistic about their future debt situation.
• Fewer Canadians believe in their ability to absorb an interest rate increase of one percentage point or an additional $100 in interest payments, as the gap between those who say it is getting better than worse is tapering.
• One third (34%) of Canadians say they are worried that someone in their household or themselves will become unemployed.

About MNP Debt

MNP LTD, a division of 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 www.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 www.MNPdebt.ca/CDI to learn more. The latest Index data was compiled by Ipsos on behalf of MNP LTD between December 7 and December 12. For this survey, a sample of 2,154 was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.4 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.