TransUnion survey unveils Canadian financial worries: 1/3 fear bill payment struggle, recession anticipation rises amid economic concerns. (BNN Bloomberg)
A recent survey conducted by TransUnion reveals that a significant portion of Canadians are apprehensive about meeting their financial obligations in the upcoming months amid concerns of a possible economic downturn.
The Consumer Pulse study, released by TransUnion on Tuesday, disclosed that 33 percent of respondents anticipate struggling to cover their bills and loan repayments within the next three months. Additionally, 28 percent foresee challenges in paying one or more of their existing bills and loans in full.
Matt Fabian, the director of financial services research and consulting at TransUnion Canada, highlighted the heightened vulnerability among Canadians due to increased interest rates and a soaring cost of living. He expressed concern about the constraints on disposable income in a more expensive economic landscape, potentially leading to difficulties in covering bills and loans, ultimately resulting in interest charges.
The survey also reflects Canadians' anticipation of an economic downturn. A significant 57 percent of respondents revealed plans to cut down on discretionary spending, while 36 percent aim to boost their savings, and 31 percent intend to pay off debts.
Fabian emphasized the shift in consumer behavior, noting that Canadians are curbing spending, focusing on savings, and sometimes resorting to credit to manage household cash flow amidst rising living expenses.
Concerns about household finances have escalated, with 43 percent of respondents indicating that their financial situations in the fourth quarter were worse than anticipated. This sentiment extends further, as 57 percent of respondents expressed pessimism about their household finances.
In light of these challenges, access to credit is deemed crucial for most Canadians facing financial headwinds. The study reveals that 39 percent of Gen Z respondents and 35 percent of millennials intend to seek new credit cards or refinance existing ones.
The survey underscores the growing importance of credit access, with 86 percent of Canadians acknowledging its significance, a notable increase from the previous year. Forty percent consider access to credit and lending products as extremely or very important for managing their financial situations.
