Nearly one in three Canadians can’t cover their bills, new survey suggests

 Nearly one in three Canadians can’t cover their debt, a new survey suggests, as inflation and rising interest rates continue to be top of mind. Credit reporting agency TransUnion, which surveyed 956 Canadian adults, found 32 per cent of respondents expected to be unable to pay off their current bills or loans in full. Of those, only 38 per cent planned to cover a partial amount.As the cost of living in Canada continues to increase, Canadians seem to be less confident in the financial state. Some 57 per cent of respondents felt their household finances were as good or better than planned, according to the study, down two per cent from the same period last year. “Macroeconomic pressures remained top of mind for Canadians as increased concern about inflation and rising interest rates affected consumer behaviours,” the report said. “Canadians remained concerned about debt — especially regarding taking on additional credit.”The pullback in spending to cope with these economic realities is noticeable. More than half of respondents said they’ve cut back on discretionary spending over the past three months, while just one in 10 said they had increased that form of spending.Of those unable to pay their bills and loans, 22 per cent said they will borrow money from friends and family while 11 per cent plan to take out a personal loan. Another 19 per cent said they don’t know how they’re going to pay. The new survey comes as Bank of Canada is expected to deliver an interest rate announcement next Wednesday. Despite a rise in the unemployment rate, forecasters expect the central bank to raise rates again next week. The central bank’s last hike in June brought the overnight rate to the highest level since 2001.With files from Ghada AlsharifJoshua Chong is a Toronto-based staff reporter for the Star’s Express Desk. Follow him on Twitter: @joshualdwchong 

Nearly one in three Canadians can’t cover their debt, a new survey suggests, as inflation and rising interest rates continue to be top of mind.

Credit reporting agency TransUnion, which surveyed 956 Canadian adults, found 32 per cent of respondents expected to be unable to pay off their current bills or loans in full. Of those, only 38 per cent planned to cover a partial amount.

As the cost of living in Canada continues to increase, Canadians seem to be less confident in the financial state. Some 57 per cent of respondents felt their household finances were as good or better than planned, according to the study, down two per cent from the same period last year.

“Macroeconomic pressures remained top of mind for Canadians as increased concern about inflation and rising interest rates affected consumer behaviours,” the report said. “Canadians remained concerned about debt — especially regarding taking on additional credit.”

The pullback in spending to cope with these economic realities is noticeable. More than half of respondents said they’ve cut back on discretionary spending over the past three months, while just one in 10 said they had increased that form of spending.

Of those unable to pay their bills and loans, 22 per cent said they will borrow money from friends and family while 11 per cent plan to take out a personal loan. Another 19 per cent said they don’t know how they’re going to pay.

The new survey comes as Bank of Canada is expected to deliver an interest rate announcement next Wednesday. Despite a rise in the unemployment rate, forecasters expect the central bank to raise rates again next week.

The central bank’s last hike in June brought the overnight rate to the highest level since 2001.

With files from Ghada Alsharif

Joshua Chong is a Toronto-based staff reporter for the Star’s Express Desk. Follow him on Twitter: @joshualdwchong

 

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