New Data Indicates COVID-19 Financial Impact on Canadians Turning a Corner
June 10 2020 - 6:00AM
TransUnion’s latest weekly study looking at the impact of COVID-19
on consumer finances in Canada, reveals consumers’ shifting mindset
from panic to preparedness. The survey of 1,078 adults conducted on
the week commencing June 1, 2020, reveals that consumers are
adjusting to a new normal around their budgeting, and that
government support and bank forbearance programs continue to
provide financial relief.
Consumer mindset shifting from panic to
preparednessThe proportion of consumers saying they are
negatively affected by COVID-19 has dropped to 55.1% (down from 58%
the week prior and 57% in Week #1 over two months ago) representing
the lowest rate since the survey started at the end of March. The
percentage of Canadians who expect their household income to be
negatively impacted is also the lowest since the inception of the
survey at 15%, compared to 19% the week prior and 24% in Week #1.
Canadians changing money patterns to better manage cash
flowThe data shows that the impact of the crisis is
fundamentally shifting household budgets. Canadians who
indicated they have been negatively impacted are using unemployment
benefits or other government subsidies, as well as paying less down
against existing debt to preserve cash flow. Specifically, more
than 1 in 3 affected consumers (35%) indicated a preference paying
only the partial amount of bills they can afford. Canadians are
dipping into investment and retirement funds at an increased rate,
with 31% of those impacted using money from TFSA or RRSP accounts
(compared to 22% the week prior and only 10% in Week #1).
Negatively impacted consumers also indicate cutting back on savings
and investments. Canadians indicating that they are not impacted
are making more modest decisions like cutting back on discretionary
spending.
Ongoing concern about paying billsTwo-thirds
(67%) of consumers impacted remain concerned about their ability to
pay bills and loans, slightly down over the past two months from
70%. Though that number remains relatively steady, the length of
time consumers feel they are able to maintain bill payments fell.
While 43% of consumers impacted felt they could maintain payments
for another 1-3 months (compared to 49% the week prior), those able
to maintain bill payments for less than 2 weeks increased from 9%
the week prior to 13%. While credit card payments remain the bill
most consumers say they won’t be able to pay (46%), the overall
proportion dropped from 48% the previous week.
Gen Z feeling the brunt of the impactGen Z are
now struggling the most as the proportion indicating they are
negatively impacted grew to 69% - the only generational cohort to
increase in the past month. In comparison, 64% of Millennials and
59% of Gen X report being negatively impacted. This may be due to a
combination of newer entrants into the workforce and students with
less savings and liquidity to fall back on.
Details about the research and additional resources for
consumers can be found on TransUnion’s COVID-19 website.
About TransUnion
TransUnion is a global information and insights company that
makes trust possible in the modern economy. We do this by providing
a comprehensive picture of each person so they can be reliably and
safely represented in the marketplace. As a result, businesses and
consumers can transact with confidence and achieve great things. We
call this Information for Good® TransUnion provides solutions
that help create economic opportunity, great experiences and
personal empowerment for hundreds of millions of people in more
than 30 countries. Our customers in Canada comprise some of the
nation’s largest banks and card issuers, and TransUnion is a major
credit reporting, fraud, and analytics solutions provider across
the finance, retail, telecommunications, utilities, and government
and insurance sectors.
For more information visit: www.transunion.ca
Contact |
Fiona Bang |
E-mail |
Fiona.Bang@ketchum.com |
Telephone |
647-680-2885 |
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