MNP has published its latest Consumer Debt Index with significant rebound
The multi-year challenges that millions of Canadians have faced are still causing anxiety among those with debts, but the overall picture has improved according to new stats.
The MNP Consumer Debt Index, published today (April 8) reveals a significant rebound of 9 points for the second quarter of 2024 compared to the previous period, to a reading of 91. The survey is conducted by Ipsos and has shown low scores for the past year.
But with the prospect of interest rate cuts ahead a larger share of respondents said their debt situation has improved compared to a year ago (27%, up 5 points) while fewer said it has worsened (16%, down 6 points).
The survey also found a reduction in the share of people who say they are concerned about their debt burden (41%, down 6 points) and those who regret the debt they have taken on in life (44%, down 3 points).
Asked if they feel better equipped to absorb a 1% interest rate hike (albeit unlikely at this stage) 25% said they are, and 24% said they could manage a $130 rise in interest payments – both of these percentages increased.
Not out of the woods
However, MNP’s president Grant Bazian said there are still risks for many Canadians.
“Things are not as bad as they were: that’s the main theme of the latest report. After recording record lows over the last year, current debt perceptions have rebounded. Canadians are more confident about their current debt situation, expected debt situation, and ability to absorb interest rate increases,” he said. “However, with looming mortgage renewals, enduring pandemic-related financial setbacks and intensifying cost-of-living pressures, Canadian households are still feeling the squeeze.”
Almost six in ten poll participants are concerned about paying all of their bills, down slightly from the first quarter of 2024.
Half of Canadians feeling the ‘Social Squeeze’ as financial pressure of social obligations means many ‘simply can’t afford to participate’ (49%) and almost half (45%) said they are $200 or less away from failing to meet all their financial obligations, including three in ten who are technically insolvent.
“Navigating the brink of insolvency or grappling with an overwhelming debt burden is more widespread than many people think. The key message here is that you're not facing these challenges alone,” says Bazian. “There is help available and seeking professional debt help sooner rather than later can prevent further escalation and pave a way out of debt.”
One-third of Canadians say they still haven’t recovered financially from the pandemic four years later (32%).
