More than two-thirds of Canadians in a national survey rank being debt-free among their top financial priorities, yet close to half feel they lost ground or only held steady in the past year in their struggle to reach their goal, according to an online poll of 1,000 Canadians.

“Becoming debt-free is a goal that most Canadians share, but few put concrete plans in place to make sure they’ll get there,” said Doug Conick, president and CEO of Manulife Bank of Canada.

Even though more than two-thirds of Canadian households (69%) continue to name “debt-freedom” as their top financial priority, a similar number say they did not make any extra mortgage payments in the past year.

The poll for Manulife Bank of Canada was conducted by Research House in late July and early August.

Despite low interest rates in the past 12 months, the poll suggests many of those surveyed did not reduce their debts. More than one in four (29%) said their debt increased in the past year, up slightly (two percentage points) from a similar poll in April.

Another 17% saw no change in their level of debt, while 16% said they did reduce their debt, but by less than they’d expected.

Fewer than one in 10 (8%) said they shaved more than they expected from their debts in the past year.

Debt-free target

When asked about their financial priorities, almost a full third (32%) of those surveyed ranked being debt-free as a ‘10’ – their top financial priority. Another 37% ranked it as a nine or eight on the 10-point scale.

“If they’re working with a financial advisor and have a plan in place, they stand a better chance of reaching their goals,” Conick explained. However, 77% of those surveyed said they prefer to manage their day-to-day finances on their own, without advice.

Mortgage flexibility

Also, 43% of those surveyed said they would have difficulty making their regular mortgage payment within three months, if the primary income earner lost their job. Of these, 17% would have difficulty after one month. A further 40% could keep up their mortgage payment for 3-12 months.

The remaining 16% have flexible mortgages that allow them to easily increase or decrease their mortgage payment as their needs change.

Almost two-thirds of those surveyed (64%) said they did not make any additional mortgage payments in the past year. Yet nearly half of respondents said they would be likely to make mortgage payments if they could easily access that money again, should their needs change.

Manulife Bank is a Schedule l federally chartered bank and a wholly-owned subsidiary of Manulife Financial Corp. (TSX:MFC).

IE