Albertans Increasingly Pessimistic About Their Ability To Absorb Higher Interest Rates And Cover Monthly Bills

2018-01-15   minute read

Zaki Alam

MNP Consumer Debt Index

According to a recent Ipsos poll conducted by MNP LTD., Albertans are increasingly worried about their ability to repay their debts. Since interest rates first rose in July, households across the province have noticed their budgets tightening as they struggle to keep up with expenses and manage other rising costs. Jumping seven percent since September, nearly one-third (31%) of Albertans now say they are unable to cover their monthly bills and debt repayments. At the same time, nearly half (46%) say they are $200 or less from not being able to meet their monthly financial obligations.

Disposable income has also declined noticeably over the previous two Consumer Debt Index surveys. The average Albertan notes a slight reduction in money left over after bills and debt payments since September and a 27 percent reduction since June. Decreasing from $1,013 to $751, households are now left with $741 to cover any irregular or unplanned costs. This has led more than four in ten (45%) to express concern if interest rates go up much further they may find themselves in financial trouble and one in three (32%) to worry it may move them towards bankruptcy.

While 80 percent of Albertans resolve to be more careful with how they spend their money, almost half (48%) still anticipate going further into debt just to cover basic expenses over the next year. This indicates many may be stuck in a dangerous debt trap. While they're heeding warnings that credit will continue to get more expensive, rising costs mean they're struggling to cover basic expenses without relying on debt to get them through.

Reflecting on their situations, 28 percent of Albertans say they are concerned about their current debt situation and nearly one third admit (31%) they regret how much debt they've taken on. Looking towards retirement, a six percent increase means more than half (53%) of Albertans now doubt their ability to be debt free by the time they leave the workforce.

Taken together, these signs all indicate people are more stretched financially than they have been in a long time. Considering that debt and its associated costs only expected to rise, many may require professional assistance to help get back on their feet.

About the MNP Consumer Debt Index

The MNP Consumer Debt Index measures Canadians' attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, follow a budget, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure /relief among Canadians. Visit to learn more.

The latest Index data was compiled by Ipsos on behalf of MNP LTD between December 8th to December 13th, 2017. For this survey, a sample of 2,001 Canadians from the Ipsos I-Say panel was interviewed online. 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. Credibility intervals are wider among subsets of the population. This represents the third wave of the MNP Debt Index.

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