Six in 10 British Columbians concerned about impact of rising interest rates, jumping seven points since September

• Half say (50%) they will be in financial trouble if rates rise, 34 per cent say rising rates could move them towards bankruptcy.
• Thirty-four percent say rising rates could move them towards Bankruptcy.
• More than four in 10 (45%) believe feeding their family has already become less affordable.
• One quarter (25%) say they do not have a solid understanding of how interest rates impact their financial situation.
• Eight in 10 (81%) say they will be more careful with how they spend their money with interest rates rising.

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ANCOUVER, BC – February 22, 2022 – As the country inches closer to the Bank of Canada’s next interest rate announcement on March 2, 2022, many British Columbia households stretched thin by rising costs of living over the COVID-19 pandemic will be bracing for a potentially challenging year ahead. Compared to the other provinces, British Columbians are the most likely to be concerned about the impact of rising interest rates on their financial situation, increasing a significant seven points from September to 61 percent, according to a recent poll conducted by Ipsos on behalf of MNP LTD.

Nearly six in 10 (57%, +2pts) say they are more concerned about their ability to repay their debts than they used to be — and half (50%, +3pts) worry they will be in financial trouble if interest rates go up much more. While fewer believe rising interest rates could move them toward Bankruptcy, one in three (34%, -6pts) still agree they could find themselves in that position should rates rise.

“We are approaching what is likely to be the first in a series of interest rate increases this year, and more British Columbians are concerned about how they would cope,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “The additional debt servicing costs are coming at a time when many British Columbians are already finding it less affordable to feed their families or pay for things like housing. Those who have taken on credit to keep up and aren’t able to pay down the debt are most vulnerable.”

With the price of goods and services rapidly rising, British Columbians are finding many areas of their day-to-day lives have become less affordable over the past year, including feeding themselves or their family (45%), putting aside money for savings (44%), clothing and other household necessities (45%), transportation (37%), housing (34%), and putting money towards paying down debt (31%). More than four in 10 (45%) say at least half of these areas of their lives have become less affordable.

Further evidence of affordability concerns, eight in 10 (81%, unchanged) say they will be more careful with how they spend their money with interest rates rising.

“I do find it encouraging to see some British Columbians are taking note of the chatter surrounding impending interest rate increases and adjusting their mindset accordingly,” says Paul. “But our findings are impacted by a lack of financial literacy, because we know many British Columbians don’t fully understand how their personal financial situation will be affected by increasing interest rates.”  

With many predicting gradual rate hikes throughout 2022, about a quarter (25%, +1pt) of British Columbians say they do not have a solid understanding of how interest rates impact their financial situation. The same number (25%) say they are concerned about their ability to absorb an interest increase of one percentage point, up a significant nine points from September.

“Hopefully those who are already struggling or anticipate financial difficulties, especially in a higher rate environment, will seek the guidance of a professional to help manage their debt,” says Paul.

Anyone can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, Licensed Insolvency Trustees provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements and Bankruptcies. With specialized debt training and education, Licensed Insolvency Trustees take a customized approach to determine the most suitable debt-relief options. 

Other key poll highlights include:

• Nearly half (47%, unchanged) of British Columbians say they are already beginning to feel the effects of interest rate increases.
• Four percent say they will renew their mortgage in the next year.
• Three in 10 (29%) say they have only paid the minimum balance on a credit card or personal line of credit.
• One in 10 (12%) say they have borrowed money they could not afford to pay back quickly.
• Two in ten (19%) rate their financial situation as ‘poor’.

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 240 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 Survey

The data was compiled by Ipsos on behalf of MNP LTD between December 1-7, 2021. 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.