TORONTO, Canada – When it comes to finances, a new CIBC survey finds that less than a third of Canadians are debt-free, and the majority of those with debt (71 percent) are comfortable with their current financial situation. That level of comfort could change quickly, however, with many (68 percent) of those with debt saying they are concerned or very concerned about the impact of rising inflation on their ability to pay everyday bills and living expenses. And if interest rates rise in 2022, 44 percent of those with debt would be concerned about their ability to make regular debt payments.
“Many Canadians faced a tough few years financially as a result of the pandemic, so it’s great to see that most people are comfortable with the amount they’re carrying and are staying on top of their payments with only a few indicating they are struggling to keep up,” said Carissa Lucreziano, vice-president, CIBC Financial and Investment Advice. “But given underlying concerns over inflation and rising rates, now is the time to start discussing and planning for managing through any challenges that might emerge.”
Canadians are optimistic about their debt
The majority of people with debt polled (78 percent) indicated they are making a reasonable effort to pay off their debt and that many Canadians with debt believe it isn’t necessarily a bad thing if managed carefully (52 percent).
Excluding mortgage debt, most Canadians believe they will be debt-free within the next five years (51 percent) and, among those with mortgages, most expect to be debt-free by the age of 55.
The survey also found that while stigma around debt continues to exist, many Canadians (60 percent) believe there is less shame around talking about debt than there used to be.
“Money matters can be an emotional subject and people often feel shame around asking for support with debt, but we’re here to help. We have the tools, solutions and services available to help Canadians improve their financial wellbeing and relieve stress as they manage their debt,” added Lucreziano.
Keeping an eye on inflation but ready for warmer weather
As Canadians head into their first summer without previous pandemic restrictions, 42 percent are looking to make the most out of the warmer weather and expect they will spend more money this summer than in previous years.
However, many Canadians (63 percent) are keeping an eye on rising inflation and are not looking to go overboard with spending with 40 percent saying they will adhere to a stricter budget as the cost of goods continues to rise.
CIBC poll – other key findings
- 30 percent of Canadians are currently debt-free, up 4-percentage points from last year;
- Among those with mortgage debt, it accounts for 84.7 percent of their total debt, on average;
- 61 per cent say they have an emergency fund, while 34 percent would need to fund unforeseen expenses elsewhere.
