A client who’s stressed about their finances might become overwhelmed and apathetic — and thus fail to take positive action. With a new poll finding that most Canadians aren’t confident in their financial situations, proactive advisors might want to discuss financial stress with clients.
Two in three Canadians (67%) say they worry when thinking about their prospects this year, finds a poll conducted for the FPSC and Credit Canada.
Most likely to keep respondents up at night are concerns that an increased cost of living will put them further in debt (34%), that they won’t keep up with monthly payments (23%) and that their debt is growing (23%). In particular, 14% are worried about an unaffordable increase in mortgage interest rates.
Respondents’ ages affected poll results, with those under 55 considerably more likely to be worried: 76% versus 52% for those over 55. Respondents with children under 18 are also more likely to have concerns (79% versus 62% for those without children).
Some Canadians also worry about the economy at large, with about four in 10 respondents expecting the Canadian economy to worsen this year (42%). This time, older respondents were more pessimistic: 47% of those aged 55 and older say the economy will worsen compared to 39% of those younger.
The discrepancy is likely indicative of older Canadians’ experience: “This isn’t their first rodeo and they know the red flags,” says Credit Canada CEO, Laurie Campbell, in a release, referring to such things as rising interest rates.
MNP, an insolvency firm, finds that Canadians are significantly more worried about interest rates and personal finance compared to last fall.
More than half of MNP survey respondents (51%) say they’re feeling the effects of rising interest rates, up 6 percentage points since September 2018. Nearly one-third (31%) say they don’t make enough to cover their bills and debt obligations, a similar increase.
More than four in 10 (45%) don’t think they can cover their living expenses in the next year without going further into debt, and a similar proportion regret the amount of debt they have (43%).
On a positive note, some clients continue to sleep soundly. About one-quarter of respondents to the FPSC and Credit Canada poll say they aren’t worried “about anything” going into 2019 (26%).
For more details, see results from the survey by FPSC and Credit Canada and the MNP survey.
About the FPSC/Credit Canada poll: Leger conducted the poll of 1,515 Canadians between Jan. 4 and Jan. 7, 2019. The margin of error was +/-2.5%, 19 times out of 20.
About the MNP poll: A sample of 2,154 Canadians was interviewed online between Dec. 7 and Dec. 12, 2018. The precision of online polls is measured using a credibility interval. In this case, results are accurate to within +/- 2.5 percentage points, 19 times out of 20.