Manitoba Residents Increasingly Feeling The Impact Of Higher Interest Rates

According to a recent Ipsos poll conducted by MNP LTD., pocketbooks across Manitoba are continuing to get lighter as a result of recent interest rate increases. The latest insights from the quarterly survey indicate Manitobans are among the most concerned about the impacts of higher interest rates (58%) — with their negative outlook growing 12 percent over the past three months. They are also increasingly worried about their current level of debt (46%), as nearly a half (47%) note they're feeling the effects of last year's hikes — a five and seven point rise respectively. Almost one in five (37%) now believe this trend could push them towards bankruptcy.

Across the province, households are struggling to balance their budgets. Not only are Manitoba residents the most likely to be $200 or less from making ends meet (52%) — a four percent increase —  they're also the most likely to say their finances already maxed out at the end of the month (33%). Consequently, close to half expect they'll require more debt over the next year just to cover basic living expenses (48%) — up five percent over the last quarter.

A lack of emergency savings also continues to be a concern. A majority lack confidence in their ability to handle an unexpected expense, with only three in ten Manitoba households believing they could manage without relying on credit. In the event of an unexpected auto repair or purchase, only 23 percent think they could afford it — a 10 percent drop. The trend is similar for taking three months off work due to illness (21%) — down 12 percent. A job loss (21%) — down 12 percent. Paying for their own or someone else's education (16%) — down 10 percent. A change in relationship status or divorce (25%) — down five percent. Or the death of an immediate family member (21%) — down seven percent.

Manitobans are in an extremely vulnerable position right now. And they seem to agree. Compared to all provinces, they are the most likely to expect their debt situation will be worse over the next one and five years respectively. It appears many households are nearing a dangerous tipping point and it's going to take some careful planning and significant cost-cutting to prevent things from getting even worse.  

Anyone who is only making the minimum payments, relying on credit to cover basic expenses or is struggling to make ends meet would likely benefit from the help of an accredited professional. The sooner the reach out, the more options they will likely have to improve their situation and prevent it from deteriorating any further.

Other poll highlights include:

• Concern over rising interest rates is being led by Millennials aged 18-34; they are significantly more likely than their older counterparts to have concerns about their ability to repay their debts as a result of a rate hike (61% vs. 53% of Gen Xers aged 35-54 and 42% of Baby Boomers aged 55+) and about moving towards bankruptcy (45% vs. 35% of Gen Xers and 23% of Baby Boomers) if interest rates continue to increase.
• Albertans (55%) are more likely to say they are already beginning to feel the effects of interest rate increases, followed by residents of Atlantic Canada (51%), Saskatchewan and Manitoba (43%), Ontario (42%), British Columbia (41%), and Quebec (39%).
• Albertans (52%) are more likely to be in financial trouble if interest rates go up much more, followed by residents of Atlantic Canada (46%), Quebec (44%), British Columbia (44%), Saskatchewan and Manitoba (42%), and Ontario (42%).
• Albertans (43%) are more likely to be concerned that rising interest rates could move them towards bankruptcy, followed by residents of Atlantic Canada (41%), Saskatchewan and Manitoba (37%), Quebec (35%), British Columbia (30%), and Ontario (29%).
• Albertans (20%) are the most likely to rate their personal debt situation as terrible, followed by Saskatchewan and Manitoba (18%), Atlantic Canada (18%), Ontario (16%), British Columbia (16%), and Quebec (13%).
• Women (50%) are more likely than men (40%) to report being within $200 of financial insolvency. At the regional level, residents of Saskatchewan and Manitoba (52%) are most likely to be within $200 of insolvency, followed by residents of British Columbia (47%), Ontario (46%), Quebec (45%), Atlantic Canada (43%), and Alberta (41%).
• Nearly eight in ten Canadians (78%) say that with interest rates rising, they will be more careful with how they spend their money.

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 www.MNPdebt.ca/CDI to learn more.

The latest Index data was compiled by Ipsos on behalf of MNP LTD between March 12 and March 16, 2018. 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 fourth wave of the MNP Consumer Debt Index.