Survey finds that 70 percent of Canadians are worried about their financial health and wellbeing
Manulife’s semi-annual Financial Health Survey, based on responses from 2,001 Canadians, found that 86 percent of respondents are worried about the trajectory of the Canadian economy. The findings show the impact of the last 18 months of uncertainty marked by surging inflation, record living costs, and a nearly fivefold increase in interest rates.
84 percent believe the country is either in a recession or headed towards one within the next year. Affordability concerns hit close to home for nearly 90 percent of Canadians, with 70 percent expressing worries about their overall financial health and wellness.
“We've been in a period of economic volatility for a number of months and that it is not likely to change any time soon. Despite slowing inflation, our data indicates that close to two-thirds of Canadian households still need to renew their mortgages at higher rates which will undoubtedly put a lot more pressure–and stress–on household finances,” says Alex Lucas, president at Manulife Bank.
Concerns about essentials like food and housing trouble 71 percent of Canadians, while 70 percent fear making mortgage payments. Of those needing mortgage renewal in the next year, 85 percent express apprehension.
The survey also found that 32 percent of homeowners with mortgages anticipate being forced to sell if interest rates rise further, and only 37 percent feel financially prepared for additional rate hikes.
Household debt is escalating, with 49 percent of indebted Canadians uncomfortable with their debt levels, and 79 percent increasingly worried about meeting repayments—a 14-point increase from a year ago.
Despite the challenges, Lucas outlines practical steps to navigate this period of economic uncertainty:
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Plan ahead: 71 percent of respondents don’t have a financial plan in place. Lucas recommends using resources such as the CRA website to create one.
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Consolidate your debt: Amidst rapid interest rate hikes, Lucas advises Canadians to consolidate lines of credit for potential interest rate savings.
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Save up for a rainy day: Advocating for a three-month savings buffer, Lucas underscores the importance of preparedness.
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Professional help: Lucas encourages those feeling overwhelmed to consult certified financial planners or advisors for guidance.
“While the results of our survey are eye-opening, there are often options available to help free up cash flow, pay down debt and help ease some of the stress,” Lucas says.
Manulife’s Financial Health Survey, now in its 13th year, was conducted online by Ipsos from October 5 to 11, surveying 2,001 Canadians aged 20 to 69 and with a household income exceeding $40,000.
