British Columbians Are Significantly Less Optimistic About Their Financial Future More Concerned About Interest Rates and Their Current Debt

Significantly more British Columbians say a rate increase could move them towards bankruptcy, up eight points to 41%. British Columbians are significantly less optimistic about their financial future one year from now and far fewer believe their debt situation will improve five years from now.  

VANCOUVER, B.C. – British Columbians are feeling significantly less optimistic about their financial future, consumer debt and personal finances than was the case just a few months ago, according to the latest MNP Consumer Debt Index; a quarterly survey conducted by Ipsos on behalf of MNP LTD. The number of British Columbians who say they expect their debt situation to improve one year from now (35%) dropped a significant 10 points since December. The number who say they believe their situation will improve five years from now (44%), dropped 11 points.

"Ambivalence about interest rates and the economy as well as the erosion of confidence in the housing market are all factors contributing to financial concerns among British Columbians,” says Lana Gilbertson, a Licensed Insolvency Trustee in Vancouver with MNP LTD, the country’s largest insolvency firm. 

Since September 2018, British Columbians’ perception of their debt situation has been on a gradual decline. Half of residents in the province are worried about their ability to repay debts (56%; -2pts) or believe they could be in financial trouble (50%) if interest rates increase. The number of British Columbians who say an interest rate increase could move them towards bankruptcy (41%) jumped 8 points since December.

While there may be red flags about where the economy and interest rates are heading, that has not stopped British Columbians from continuing to borrow. Slightly more British Columbians report taking on consumer debt compared to this time last year; six in 10 (63%) say they have, up 3 points. What’s more, it seems many may continue to borrow with four in 10 (43%; +4pt) indicating that they won’t be able to cover all living and family expenses in the next 12 months without taking on more debt. Around the same number (41%) are concerned about their current level of debt and regret the amount of debt they have taken on in their life (43%).

“Household budgets are very tight. Paying down debt or saving for the future has almost become a luxury that few can afford,” says Gilbertson.

Four in 10 (39%) British Columbians say they are $200 or less each month away from financial insolvency. This includes one quarter (25%) who say they have no wiggle room at month-end, as they already don’t make enough to cover their bills and debt payments.

“What’s most alarming is that people appear to be maxed out with no real plan for paying back what they have borrowed. With so many questions about how and if the debt can be repaid, particularly if the real estate market continues to deteriorate and interest rates rise, it is important that individuals struggling financially get professional advice,” says Gilbertson.

Licensed Insolvency Trustees are the only federally regulated debt professionals empowered to provide a full range of debt relief options including consumer proposals, bankruptcies, informal debt settlements, and debt consolidation.

About MNP Debt

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 Canadian 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 get a free checkup for your debt health using the MNP Debt Scale.

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 or relief among Canadians. Visit MNPdebt.ca/CDI to learn more. The latest Index data was compiled by Ipsos on behalf of MNP LTD between March 13 and March 24, 2019. For this survey, a sample of 2,070 was interviewed online. 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 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.