Nearly half of British Columbians are starting 2025 just $200 or less away from financial insolvency

• Nearly a third say they are already insolvent, unable to cover their bills and debt obligations (31%, +3 pts).
• British Columbians have $97 less left over at the end of the month on average.
• Almost half believe they won’t be able to cover all living expenses in the next 12 months without going further into debt (49%, +2 pts).

VANCOUVER, BC – January 13, 2025 – Nearly half of British Columbians are teetering on the edge of financial insolvency heading into 2025, despite declining interest rates. According to the latest MNP Consumer Debt Index, the proportion of British Columbians (46%) indicating they are $200 or less away from insolvency has sharply increased, jumping nine points and reversing the improvements made last quarter. Nearly a third of British Columbians say they are already insolvent (31%), increasing three points.

“While interest rate cuts initially relieved some financial strain, many British Columbians are starting 2025 in a difficult financial position,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “Holiday bills are coming due, squeezing household budgets. Broader economic uncertainties, including concerns over U.S. tariffs, may further compound financial anxieties.”

The strain on household budgets is reflected in the growing proportion of British Columbians (49%, +2 pts) who believe they will not be able to cover all their living and family expenses in the next 12 months without going further into debt. Additionally, the financial cushion for many households is eroding as disposable income shrinks, leaving less room to manage unexpected expenses. British Columbians have $97 less left over at the end of the month on average, decreasing to $996 this quarter.

A growing proportion of British Columbians also expect their debt situation will worsen one year from now (18%, +2 pts), while the proportion who anticipate their situation will improve remains unchanged (30%).

“Less disposable income leaves households less prepared for unexpected expenses or economic impacts,” explains Paul. “For those living on a tight budget, any disruption could quickly snowball into significant financial trouble.”

The possibility of unexpected expenses or changes in circumstances weighs heavily on British Columbians. About a third (31%, +4 pts) express a lack of confidence in their ability to cope with an unexpected auto repair or purchase, or a change in their relationship status (32%, +5 pts).

More British Columbians are now close to insolvency or already insolvent. However, there are some signs of improved sentiment following the consecutive interest rate cuts in 2024. Fewer British Columbians (42%, -6 pts) are concerned about their ability to repay their debts, even if interest rates decline. A third (34%) are concerned that rising interest rates could move them towards Bankruptcy, dropping seven points. While fewer this quarter (59%, -5 pts) say they desperately need interest rates to go down, three in five are still desperate for interest rates to decline.

"Many British Columbians have already begun making adjustments to their budgets and cutting costs to manage the high cost of living and their debt obligations,” explains Paul. “However, these efforts may still fall short of delivering the relief they need. It’s crucial to remember that support is available, and reaching out for help can be the key to effectively navigating their financial issues.”

British Columbians’ ability to absorb an extra $130 in interest rate increases has deteriorated as financial pressures rise. Significantly fewer this quarter (18%, -7 pts) feel much better equipped to handle such an increase. Three in 10 (31%, -3 pts) report their ability to handle such an increase has worsened.

Paul says the convergence of post-holiday bills, economic pressures, and unexpected expenses can exacerbate financial challenges. While the new year is traditionally a time for setting financial goals, some British Columbians will find themselves grappling with the financial fallout of holiday spending. Seeking support can help address debt concerns early in 2025.

“Many people feel overwhelmed during this time of year as the holiday bills arrive and financial challenges become more apparent. However, seeking professional guidance is a good first step in turning things around and avoiding more serious repercussions like wage garnishments and collection calls,” says Paul. “A conversation with a Licensed Insolvency Trustee allows individuals to explore debt relief solutions like budgeting, debt consolidation, debt management plans, Consumer Proposals, and Bankruptcy to determine the best course of action for their situation.”

Reaching out for advice from a Licensed Insolvency Trustee is a critical first step for those feeling overwhelmed by debt. Licensed Insolvency Trustees provide free consultations to help individuals assess their financial situation, understand their options, and create customized plans to regain control of their finances.

MNP’s national team of Licensed Insolvency Trustees offers free consultations across the country to help severely indebted British Columbians 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-first wave, the Index has decreased to 79 points, down 10 points since last quarter to reach the second-lowest score recorded since its inception. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between December 6 and December 17, 2024. For this survey, a sample of 2,003 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.