MNP Consumer Debt Index reveals declining financial confidence and increasing debt concerns among British Columbians due to pandemic

• Over half regret the amount of debt they have taken on, the highest proportion compared to the other provinces (+5).
• Nearly half not confident they can cover living expenses this year without going further into debt (+3).
• British Columbians are the most likely to have taken on more debt as a direct result of the pandemic (31%), and the most likely to say debt keeps them awake at night (27%).

VANCOUVER, BC –January 18 , 2021 — As pandemic-related economic pain and wage losses continue in B.C., there are signs 2020’s financial stressors will continue to exact a toll well into 2021. Now in its fifteenth wave, the MNP Consumer Debt Index found more than half (52%) of British Columbians regret the amount of debt they have taken on, a five-point jump since September and the largest proportion compared to the other provinces. The quarterly survey, which is conducted by Ipsos on behalf of MNP, also found nearly half (46%) don’t believe they can cover their living expenses for the next year without going further into debt, a three-point increase from September.

“Our research shows financial pressure is mounting for the majority of British Columbians,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “It is very concerning to see so many people already feeling like they can’t afford their living expenses — particularly with so much uncertainty still ahead.”

Compared to the other provinces, the survey found British Columbians (31%) are the most likely to have taken on more debt as a direct result of the pandemic. This includes using credit cards (17%) or lines of credit (8%) to pay off bills, borrowing money from friends or family (14%), taking out a bank loan (2%), or using a payday loan service (4%).

“The results can be disastrous when those who are already struggling financially try to cope by taking on additional debt. It’s like attempting to fill one hole by digging another,” explains Paul.

The survey also highlighted the risks of heavy reliance on credit. Almost half of British Columbians (48%, unchanged) are afraid they could find themselves in financial trouble if interest rates go up. Accumulating personal debt is also more likely to be keeping British Columbians up at night, with more than a quarter (27%, +2) indicating their debt is getting in the way of a restful night’s sleep — more than any other province. British Columbians are also the most likely to say they lie awake worrying about how they will pay their bills (24%, -3) or afford essentials for their family (24%, +2).

“Unexpected crises are among single greatest causes of serious financial trouble in Canada, and the pandemic set many unexpected life-changing financial disturbances into motion. Some which many people either didn’t or couldn’t have prepared for,” says Paul. “Things like wage loss, change in relationship status, or the death of an immediate family member can all have a snowball effect on debt.”

Just one in three British Columbians (34%, +2) are confident they could cope with life-changing events such as a change in their relationship status (34%, unchanged), or loss of employment / a change in wage or seasonal work (27%, +1) without increasing their debt burden. Fewer British Columbians feel confident they could cope financially with the death of an immediate family member (22%, -7) without increasing their debt load.

Low interest rates may also be providing a false sense of comfort for some, with six in 10 (62%) indicating they feel that now is a good time to buy things they otherwise couldn’t afford. Four in 10 (38%) say they’re more relaxed about carrying debt than usual. This may be why fewer (24%) say they’re losing sleep due to COVID-19 economic concerns (-7 since June) or the recession (23%, -2).

“Piling on more debt is dangerous because it can trap people in an endless cycle that can be nearly impossible to get out of,” says Paul. “Anyone feeling cash-strapped and/or facing a pile of bills they know they can’t pay should get reputable, professional advice right away.” 

Paul says shame and pride often cause deeply indebted individuals to draw out their situation far too long. Some may face aggressive collections activity or debt-relief scams which only result in more stress and more sleepless nights.

Paul and her team offer Free Confidential Consultations to help severely indebted British Columbians understand their rights and determine the best path forward. During these no obligation meetings, they review an individual’s debt, savings, assets, income, and overall financial situation. They also provide information and recommendations about each of the debt-relief options available — from debt reduction strategies and debt consolidation, to filing a Consumer Proposal or Bankruptcy — and explain each in detail.  

“We are specifically trained to help get people out of debt. Everyone’s situation is a bit different: a Consumer proposal or Bankruptcy may be a necessary step for some, but others simply need advice to develop a budget and plan to deal with their debt. As federally regulated Licensed Insolvency Trustees, we can help determine the best option based on individual circumstances.”

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 230 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 fifteenth wave, the Index currently stands at 89 points, the lowest reading ever recorded, on the heels of a record-lows in March and September of 2020. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the fifteenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between December 1-3, 2020. 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.