Rising prices put the squeeze on everyday purchases, while rate hikes raise questions on retirement plans
With higher borrowing and living costs seemingly with us for the foreseeable future, Canadian consumers are now also fearing entrenchment of another challenge to their finances.
While interest rates and inflation are already squeezing budgets, the fear of everyday products staying at higher prices while getting smaller – known as ‘shrinkflation’ - is the top concern (84%) revealed in a new survey from Ipsos.
Affordability concerns related to inflation (81%) and interest rates rising faster then they can adjust (71%) complete the top three concerns in the poll conducted for Global News.
How economic issues will impact retirement plans, having to delay major purchases, and being unable to meet unexpected costs of $1000+ are concerning for more than 6 in 10 respondents.
As with previous polls, this study shows how younger Canadian adults are bearing the lion’s share of concerns around finances.
However, it’s not the youngest cohort (Gen Z) who are struggling the most financially but Millennials, who are core working age and more likely to be homeowners and have dependents than the younger generation.
Debts and credit
Across all generations, stress relating to debts are elevated with 55% concerned they won’t be able to pay their full credit card bill and 47% thinking that they may need to use a line of credit to pay their credit card bill. Again, Millennials are most concerned.
The situation means a greater shift towards needs rather than wants with 53% concerned about not being able to afford a vacation this year, 56% cutting back on dining out, and 48% reducing spending on entertainment.
Buying clothes is also a lower priority while more Canadians report using flyers and coupons to make savings on groceries.
Meanwhile, many working age Canadians are thinking of putting their retirement saving on hold as Millennials (16%) and Gen X (17%) are significantly more likely to be considering this than Boomers (10%) and Gen Z (4%).
