Survey finds that Canadians can’t pay bills
Results of a new survey have revealed a lot of doom and gloom for Canadians as it suggests that up to one third of Canadians are unable to pay their monthly bills.
This finding is bad news as the Bank of Canada, who already raised interest rates twice last year are on track to do the same this year, pushing more and more Canadians into deeper debt.
According to the quarterly MNP consumer debt index survey conducted by Ipsos, not only are more people feeling the pinch, but more Canadians have less disposable income than previous reporting periods.
“With interest rates on the rise, Canadians are more stretched financially than they have ever been before,” MNP President Grant Bazian said in a statement. “I wouldn’t say we’re at a major tipping point yet, but likely not far off.”
One third of survey respondents stated that rising interest rates could result in them eventually having to file for bankruptcy, while four of ten respondents stated that they feared financial trouble if interest rates continued to rise.
The scary statistic found that half of survey respondents stated that over the next year, they would have to take on even more debt in order to get by.
“We have a whole generation of Canadian consumers who have never experienced anything but rock bottom interest rates, and many of them have financed everything in their lives — from education, to houses, to cars, and even everyday purchases — without really putting much thought into debt servicing costs,” Bazian
“On top of that, low returns for savers has undermined the notion that saving is a worthwhile activity so most young people don’t have a cushion to handle any kind of unexpected expenses.”
“While Canadians say they are heeding rate increase warnings, they are still reliant on credit to make their household budgets work. The result may be
a dangerous debt trap that will be impossible for some to ever get out of.”
70 percent of survey respondents did state that they would be much more careful with their finances this year.