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Stable interest rates are a cold comfort to those already struggling to make ends meet
Winnipeg, MB – October 28, 2019 – Despite the Bank of Canada stating it will keep interest rates stable until next year, more than half (54%) of Manitoba and Saskatchewan residents say they are more concerned about their ability to repay debts than they used to be. This could be the result of declining wiggle room in household budgets. After paying all their current bills and debt obligations, Manitoba and Saskatchewan residents say they have $606 left at the end of the month on average — a drop of $138 since June. Nearly half (50%, +10 pts) now say they are left with less than $200, including one-third (33%) who already don’t make enough money to cover all their bills and debt obligations (+12 pts).
The findings are part of the latest MNP Consumer Debt Index conducted quarterly by Ipsos. Now in its tenth wave, the Index tracks Canadians’ attitudes about their consumer debt and perception of their ability to meet their monthly payment obligations.
Average Finances Left at Month-End
“There has been a significant jump in the number of people in the province who say they are close to not being able to — or already can’t — cover their bills each month,” says Gord Neudorf, a Winnipeg-based Licensed Insolvency Trustee with MNP LTD, the country’s largest personal insolvency practice. “Since household budgets are already strained, many aren’t putting anything away for rainy day savings. It is most often unexpected expenses that derail household budgets and lead to default.”
Seven in ten (73%) say they are not confident in their ability to cope with life-changing events — such as a divorce, unexpected auto repairs, loss of employment or the death of a family member — without increasing their debt.
“Unexpected expenses are most devastating for people who already teetering on the edge and have a large amount of debt. Our research shows half of households in Manitoba and Saskatchewan do not have enough cash for inevitable life events like a car repair,” says Neudorf, who recommends having at least three to six months of expenses saved in case of emergencies.
With so many struggling to make ends meet, it’s no surprise fewer feel optimistic about their financial futures. One-third (34%) expect their debt situation will be better a year from now, a drop of nine points. Nearly half (47%) believe it will be better five years from now (-3 pts). At the same time, one quarter (25%) say their debt situation is better than it was a year ago (unchanged) and one-third (35%) say it is better than five years ago (-1 pts).
“We see many are drowning in debt and most don’t have a clear path to repayment. Despite the anxiety people are feeling, many are reluctant to get professional debt help,” says Neudorf, pointing to evidence from the research showing many may intend to take on more debt over the next year.
Just about half (46%) of Manitoba and Saskatchewan residents say they don’t think they will be able to cover all their living and family expenses for the next 12 months without going further into debt, a 4-point decrease since June. Furthermore, just under half (47%) are confident they won’t have any debt in retirement, a five-point drop.
“Some have resigned themselves to being in debt forever. Interest rates may be stable right now but that is not a help to those already struggling to make their debt payments at the current rates,” says Neudorf.
A large portion of Manitoba and Saskatchewan residents (43%) are concerned about how rising interest rates will impact their financial situation, up four points since June. Forty-six percent agree if interest rates go up much more, they are afraid they will be in financial trouble (+1 pt). Finally, 4 in 10 (38%) are still concerned that rising interest rates could move them towards bankruptcy (+5 pts).
“Even if you have amassed a large amount of credit card debt, a line of credit, mortgage, car loan — or all of the above — there are debt relief options. If you feel like your debt is out of control, get professional advice right way. One of the biggest mistakes people make is waiting too long to seek help,” says Neudorf.
MNP LTD offers Free Confidential Consultations with Licensed Insolvency Trustees to help individuals understand their debt relief options. Licensed Insolvency Trustees are the only government-regulated debt professionals who offer a full range of debt relief options and can guarantee legal protection from creditors through Consumer Proposals and Bankruptcies.
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.
About the MNP Consumer Debt Index
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. Visit
www.MNPdebt.ca/CDI to learn more.
The latest data, representing the tenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between September 4 – 9, 2019. For this survey, a sample of 2,002 Canadians aged 18 years and over was interviewed. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +2.5 percentage points, 19 times out of 20, of what the results would have been 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 the provincial data is available by request.
Gord Neudorf, CIRP, LIT, CPA, CA Senior Vice-President, MNP LTD T: 1.877.231.6167
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