MNP Consumer Debt Index holds steady following two interest rate pauses as Canadians brace for ongoing economic uncertainty

• Younger adults and lower-income households are most likely to report stress, stalled life plans, and living paycheque to paycheque.

CALGARY, AB – July 14, 2025 – The latest MNP Consumer Debt Index has remained stable at 88 points this quarter. However, nearly two-thirds of Canadians say they desperately need interest rates to go down, relatively consistent since last quarter (64%, +1 pt). Despite the Index stabilizing, the cost of living and ongoing economic uncertainty continue to weigh on households. More than a third (36%) of Canadians report feeling anxious or stressed about their financial situation. A quarter say they feel like they’re having to put their life on hold (26%) or are constantly putting out financial fires as they face one unexpected cost after another (24%).

“Canadians have not witnessed such economic uncertainty since the COVID-19 pandemic. While financial perceptions have somewhat stabilized, many households feel like their lives are on hold, stuck in a financial holding pattern as they wait for the proverbial dust to settle,” says Grant Bazian, president of MNP LTD, the country’s largest insolvency firm. “Many Canadians are hesitant to make major financial or life decisions due to persistent economic pressures and a backdrop of global volatility.”

Younger adults and households with a lower income are consistently among the most likely to report financial strain and feeling stalled. A third (33%) of Canadians aged 18-34 say they feel stalled, or like they’re having to put their lives on hold. Those with household incomes under $40,000 (30%) are also the most likely to feel stalled. Additionally, younger Canadians aged 18-34 (45%) and those with household incomes of less than $40,000 (44%) are the most likely to report feeling anxious or stressed about their financial situation. A third (32%) of Canadians feel stuck living paycheque to paycheque, with those aged 18-34 (37%) and 35-54 (39%), and those earning less than $40,000 (45%), being the most likely to feel this way. However, younger Canadians aged 18-34 (32%) are also the least likely to say they are feeling cautious with how they manage their money due to current financial pressures, compared to Canadians overall (37%).

“Those making careful choices and delaying major decisions may still be struggling to get ahead amid the current uncertainty around costs and income, even after two interest rate pauses,” says Bazian. “Many vulnerable households — particularly younger adults and lower-income Canadians — may feel like they’re constantly putting out financial fires.”

Two in five Canadians (41%) have reduced discretionary spending in response to current financial pressures. A third (33%) are increasing savings or building emergency funds, and more than a quarter (27%) are prioritizing debt repayment. Nearly a quarter (23%) of Canadians are putting important life goals on hold — such as buying a home, starting a family, or changing careers. Younger Canadians aged 18-34 are the most likely to delay these types of milestones (33%).

More Canadians this quarter say they are concerned rising interest rates could drive them toward Bankruptcy (41%, +3 pts), despite interest rates holding steady twice this year. A significant proportion of Canadians (45%, +2 pts) remains concerned about their ability to repay their debts, even if interest rates decline.

“Persistent fears remain around interest rates,” says Bazian. “For some households, the damage has already been done. There may be some deep anxieties about what could still be to come after years of rising costs, high interest rates, and depleted savings.”

A third of Canadians (33%, +3 pts) expect their debt situation to improve one year from now, and a larger proportion (40%, +1 pt) believe it will improve in five years. However, more than one in 10 (13%) expect their debt situation to worsen over both horizons. Fewer Canadians this quarter believe they will be able to cover all living expenses in the next year without taking on more debt (54%, -4 pts).

There are signs that some Canadians are beginning to regain a modest sense of financial control amid economic uncertainty. The average amount households have left at the end of the month has increased to $916, up $49 from last quarter. This marks the second-highest amount recorded since tracking began in 2017, potentially signalling that more Canadians are building a financial buffer in case of further economic disruption.

Increases were most pronounced among Canadians aged 55 and older (+$84) and those in middle- to higher-income households. Households earning between $60,000 and $100,000 reported the most significant jump (+$260), followed by those earning $100,000 or more (+$129).

Canadians’ net personal debt rating held relatively steady at 21 points (-1 pt), maintaining gains made earlier this year after rebounding from a record low of eight points in December 2024.

“These are small but encouraging signs that some households may be regaining a bit of financial footing,” says Bazian. “While challenges remain, any movement toward greater stability is meaningful in this environment.”

However, a significant proportion of Canadians remain on precarious financial footing.

“About 14 million Canadians remain close to financial insolvency, with little to no ability to absorb an unexpected expense or income disruption,” says Bazian.

Two in five Canadians (42%, -1 pt) say they are $200 or less away from financial insolvency each month. This includes more than a quarter (27%, +1 pt) who say they are financially insolvent. Nearly half of Canadians (46%) say they regret the amount of debt they have taken on this quarter, increasing three points, and two in five (44%, +2 pts) are concerned about their current debt level.

Bazian urges those feeling overwhelmed by debt or financial pressure to speak with a Licensed Insolvency Trustee. Licensed Insolvency Trustees provide unbiased advice on the full range of debt relief options available and administer personalized solutions to help individuals regain control over their finances.

“Whether you’re missing payments, dealing with collection calls, or just unsure of how to get back on track, Licensed Insolvency Trustees can help you understand your options,” says Bazian. “These professionals are there to help you understand your financial situation and explore all your debt relief options in a judgment-free environment.”

Bazian says it’s a sure sign it’s time to ask for help if financial stress is causing sleepless nights. “Many people are facing the same struggles right now, and just reaching out can lift a huge weight off your shoulders. Getting advice early can make all the difference.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations across the country to help severely indebted Canadians get unbiased debt advice, understand their rights, and determine the best path forward. Licensed Insolvency Trustees are the only federally regulated debt professionals who can assist with all the debt relief options, including Consumer Proposals and Bankruptcy, stop harassment from debt collectors, and discharge people from debt.

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 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, 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.

Now in its thirty-third wave, the Index has held firm at 88 points — the same level as last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between June 9 and June 13, 2025. 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.