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Two-in-five do not expect to escape debt in their lifetime
and the spending-to-income ratio is trending negatively in
Canada according to Manulife Bank
Debt Survey.
- Ninety-four per cent of Canadians say the average household is
in too much debt.
- The spending-to-income ratio is trending negatively as 45 per
cent report that their spending is increasing faster than their
income versus 33 per cent from the spring.
- Sixty-seven per cent of Canadians who are in debt assume
everyone else is as well. Two in five doubt they will ever be
debt-free in their lifetime.
TORONTO, Nov. 22, 2019 /CNW/ - An overwhelming majority of
Canadians agree the average household is in too much debt according
to the latest findings from Manulife Bank Debt Survey. Likewise,
two-in-five indebted Canadians do not expect to escape it in their
lifetime and the incidence of Canadians with considerable
non-mortgage related debt is climbing.
Household debt becoming overwhelming
Virtually all Canadians (94 per cent) surveyed agree the average
household is in too much debt. Since Spring 2019, there has been a
nine-point increase (55 per cent vs. Spring 2019 at 46 per cent) in
the incidence of Canadians who report having considerable
non-mortgage related debts. Sixty per cent of them report that they
have non-mortgage related debt on credit card(s) that carry a
balance, a twelve per cent increase over what was observed in
Spring 2019 (48 per cent).
"There is a financial wellness crisis, and it's affecting
Canadians of all demographics," said Rick
Lunny, President and CEO, Manulife Bank. "The good news is
that there are intuitive, helpful tools out there to make people's
financial decisions easier and lives better."
Spending continues to affect Canadians with the
spending-to-income ratio trending negatively from 33 per cent in
Spring 2019 to 45 per cent this fall. In fact, only 12 per cent of
respondents noted their income is increasing faster than their
spending.
Financial outlook by generation
Are Canadians living in Generation Debt? Baby Boomers are in
much better financial shape than their Generation X and Millennial
counterparts, both of which are struggling. Three-in-five Baby
Boomers surveyed noted they are better off financially than their
parents were at the same age, compared to just under half (49 per
cent) for Generation X and Millennials.
Generation X, which perceives itself as being in the most debt,
saves the least of its after-tax income and is most likely to
report that spending is outpacing income, and is the most skeptical
about ever being debt-free in its lifetime according to the
survey.
Millennials are struggling too, as they have experienced the
most difficulty when trying to enter the workforce (14 per cent
stated they struggle a lot versus nine per cent for those aged
41-69 years old). However, things are not entirely bleak for this
group as they are among the most likely to indicate that their
income is increasing faster than their spending (14 per cent versus
10 per cent for those 41-69 years old). Technology may also help
them get into better shape financially than their predecessors.
Three in four millennials feel it is important to have access to
financial plans online, preferably through an app.
Over half of indebted Millennials who feel in control of the
situation indicate that technology has helped them manage their
debts compared to just one in three Generation X & Baby Boomer
Canadians.
"We know Canadians are looking for straightforward digital
options to monitor and manage financial goals. That is why we built
our new app experience from the ground up and centred it on what
our customers need. We are dedicated to continuously developing and
delivering digital, customer-centric tools – like our Savings
Sweeps which automatically moves excess money into your savings
account each night – helping Canadians save and manage their money
better," said Rick Lunny, President
and CEO, Manulife Bank.
Relationships and finance
Approximately nine-in-ten Canadians feel comfortable sharing
their complete financial picture with their spouse.
While many share financial responsibilities with their partner,
of the 21 per cent of people who do not combine finances and are
not considering it, 41 per cent cite ideology and more specifically
a mutual belief that financial autonomy is important (23 per cent).
In addition, nine per cent cited their partner's shopping addiction
and another three per cent noted their partner's addiction to drugs
and/or alcohol as reason to keep finances separate.
Competing financial priorities can make it hard to manage
finances while in a relationship. Should you focus on paying off
debt, maxing out your retirement contributions, budgeting for a
down payment on a house, or saving up for that big trip abroad?
Sorting out financial goals and identifying what matters most is a
smart way to create an actionable financial plan.
Learn more about the Manulife Bank of Canada Debt Survey and
ways to manage finances by visiting:
www.manulifebank.ca/debtresearch
About the Manulife Bank of Canada Debt Survey
The
Manulife Bank of Canada poll
surveyed 2,001 Canadians in all provinces between ages 20 and 69
with household income of more than $40,000. The survey was conducted online by Ipsos
between September 20 to September 26,
2019. National results were weighted by gender, age, region
and education. This survey has a credibility interval of +/- 2.5
per cent 19 times out of 20, of what
the results would have been had all Canadian adults between the
ages of 20 and 69 been surveyed.
About Manulife Bank
Established in 1993, Manulife
Bank was the first federally regulated bank opened by an insurance
company in Canada. It is a
Schedule l federally chartered bank and a wholly-owned subsidiary
of Manulife. As Canada's first
advisor-based bank, it has successfully grown to more than
$22 billion in assets and serves
clients across Canada.
About Manulife
Manulife Financial Corporation is a leading international financial
services group that helps people make their decisions easier and
lives better. With our global headquarters in Toronto, we operate as Manulife across our
offices in Canada, Asia, and Europe, and primarily as John Hancock in the
United States. We provide financial advice, insurance, as
well as wealth and asset management solutions for individuals,
groups and institutions. At the end of 2018, we had more than
34,000 employees, over 82,000 agents, and thousands of distribution
partners, serving almost 28 million customers. As of September 30, 2019, we had over $1.2 trillion (US$881
billion) in assets under management and administration, and
in the previous 12 months we made $29.8
billion in payments to our customers. Our principal
operations in Asia, Canada and the
United States are where we have served customers for more
than 100 years. We trade as 'MFC' on the Toronto, New
York, and the Philippine stock exchanges and under '945' in
Hong Kong.
SOURCE Manulife Financial Corporation