The Consumer Debt Index Shows the Influence of Purchases

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Young Canadians experienced the biggest drop in income at the end of the month, down $273 from the previous quarter to $606.
More than half of Canadians now say it is affordable to feed themselves and their families, a five-point increase from last quarter (52% + 5pts).
The number of Canadians who say transportation has become cheaper jumped 9 points (45% + 9pts).
Almost half of Canadians are finding clothing or household essentials cheaper (45% + 5pts).

CALGARY, Alberta, Oct. 03, 2022 (GLOBE NEWSWIRE) — The effects of this year’s consecutive interest rate hikes and persistent inflation are becoming apparent, as Canadians feel the impact on their wallets. According to the latest MNP Consumer Debt Index, which is conducted quarterly by Ipsos on behalf of MNP LTD, while the cost of living has risen, many Canadians say their living standards have declined. Compared to December 2021, more and more people say it will be cheaper to feed themselves and their families (52% + 5pts), put money aside for savings (49% + 5pts), pay for transportation (45% + 9pts), pay for clothes or other household needs ( 45% + 5pts) and paying the house (37% + 2pts).

Grant Bazian, president of the Canadian government said: MNP LTD., the country’s largest insolvency company.

While fewer Canadians are finding themselves closer to insolvency than last quarter (46%, -6pts), meaning they are $200 away or less from not being able to meet all of their financial obligations, most Canadians have less monthly spending- end when they are paying more for the necessities of life. Canadian net income at the end of the month continues to decline, down $37 from the previous quarter to $654. Canadian youth are being hit hard; those aged 18-34 saw the biggest drop in their end-of-month spending, dropping $273 to $606.

“We’re seeing a slight improvement in the number of Canadians who are at risk from the previous quarter, however, it’s important to note that almost half of Canadians are still $200 in default on their mortgages and loans. . With less room in their budgets, “any increase in interest rates or prices of everyday goods can push people closer to insolvency,” says Bazian. “Young Canadians are feeling the impact of inflation more than anyone else, and they will be more vulnerable to economic changes as a result.”

Yet while many Canadians are in dire financial straits, there is some hope. More now rate their credit as excellent (43% +5pts) and fewer see it as dangerous (14%, -4pts). When asked to state their credit expectations a year from now, three in ten expect their credit to improve (30%, unchanged), but fewer now believe it will worsen (11%, -4pts).

“This new hope may be temporary, because the economic situation here in Canada is still there. The effects of interest rate hikes play out over time, so we’re seeing false positives right now,” says Bazian. “We’ve also seen optimism rise in the summer, followed by Canadians becoming pessimistic in the winter months. I encourage people to be careful with their income during the summer and winter, because only this time will tell how our economy will be affected. “

Bazian advises families to take a good look at their budget and assess whether they can afford to pay all their debts if their daily purchases and debts continue to rise. If more debt is needed to pay off the debt, Mr. Bazian says he should seek the help of a Licensed Insolvency Trustee who can provide an unbiased, systematic review of their finances and offer options to eliminate existing debt. Only Licensed Insolvency Trustees, who are regulated by the state, can offer all debt relief options including debt settlement, purchase proposals and debt settlement.

“Some mistakenly believe that things are not as good as they are or they refuse to get worse. In all these cases, unfortunately, it is often too late to seek help. “Waiting for a long time not only reduces the debt relief options they can choose but also increases the time they spend stressing and worrying,” said Bazian. “Seeking the help of a Licensing Supervisor should not be a last resort. Getting to the early signs of stress can help people get a fresh start sooner.”

Now in his 22nd^and wave, the MNP Consumer Debt Index has continued to rise after seeing the lowest figures in March 2022, adding two points from the previous quarter. The index, which tracks Canadians’ perceptions of their debt and their ability to meet their monthly payments, is now at 92 points, still below pre-pandemic levels and lower than any other September wave.

Opinions of the company MNP LTD

MNP LTD, part of the national accounting firm MNP LLP, is Canada’s largest insolvency practice. For over 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from financial difficulties and get their finances back on track. With more than 240 Canadian offices from coast to coast, MNP helps thousands of Canadians each year who are struggling with debt. Visit MNPdebt.ca to contact a Licensed Insolvency Provider or use our free Do it Yourself (DIY) credit assessment tools. For regular, great insights on debt and your finances, subscribe to the MNP 3 Minute Debt Break Podcast.

About the MNP Consumer Debt Index

The MNP Consumer Debt Index measures Canadians’ perceptions of consumer debt and assesses their ability to pay their debts, withstand unexpected losses, and adapt to fluctuations in interest rates without defaulting on debt. Administered by Ipsos and updated quarterly, the Index is the leading measure of economic or leisure activity among Canadians.

Now in his 22nd^and wave, the Index has increased two points since the previous quarter to 92 points, although it is still below the benchmark established five years ago. Visit MNPdebt.ca/CDI for more information.

The data was collected by Ipsos on behalf of MNP LTD between September 6-13 2022. For this survey, a sample of 2,000 Canadians aged 18 and over were interviewed. Then the measurement was used to balance the population in order to ensure that the recorded information is consistent with the elderly population according to the Census and to provide the results of measuring equality with the whole environment. The accuracy of Ipsos online polls is measured using confidence intervals. In this case, the survey is accurate to ± 2.5 percent, 19 times out of 20, all Canadian adults were polled. The confidence interval will be larger among smaller groups of people. All research samples and polls are subject to some form of error, including, but not limited to, publication error, and measurement error.

Regional data is available upon request.

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A photo of the announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/fd480ed5-0dfc-45e3-aaa2-764b1fc97158