Over half of Canadian respondents said struggling to meet expenses was one of the greatest short-term risks
27 March 2019
Finances are a common source of stress, but what specifically is keeping Canadians up at night? We examined the latest release of OECD data to find out.
The majority of Canadians (54%) think the economic situation is worse now than it was 12 months ago, according to the OECD. Canadians are most likely to be worried about meeting short-term expenses, with just over half of respondents (51%) saying it was one of the three biggest risks over the next year.
Should we be surprised? Not really.
Canadians are likely worried about feeling the pinch due to a number of economic factors. First, debt has risen to record levels with the debt-to-disposable income ratio hitting 174%. In addition, total net worth has declined year on year for the first time since the financial crisis. The cost of living in Canada has also risen. In fact, last year it increased at its fastest pace since 2012. The Consumer Price Index was also up 1.4% from January 2018 to 2019.
The next biggest concerns after meeting expenses was the risk of becoming ill or disabled (48%) and losing a job (36%). Over a quarter of respondents also identified accessing long-term care, as well as crime or violence, as one of the three biggest short-term risks.
When asked about long-term risks, financial security in old age was the most commonly cited concern (67%). The concern is warranted, given a 2016 StatCan study found that seniors with insufficient funds for retirement reported lower levels of life satisfaction.
While the majority of Canadians are simply worried about the cost of retirement, the next most commonly cited risk was not attaining status and comfort. The report found that 46% of respondents claim they’re worried about not attaining the little luxuries in life. This was followed by ensuring the long-term care of family members (36.7%), adequate housing (33.8%) and children not attaining status and comfort (31%).
Interestingly, adequate housing was only a key short-term risk for 24% of respondents, but a long-term risk for an additional 10% of respondents (34%). Economists also have a negative outlook for short-term housing affordability, with 64% citing a negative 6-month outlook in Finder’s March Bank of Canada Overnight Rate report.
Many short- and long-term risks are related to Canada’s ageing population, and it’s likely these concerns will grow as the population continues to age. While just 8% of the population was aged 65 years and over in 1971, this figure more than doubled in 2010 (14%) and it’s predicted that almost a quarter (23%) of the population will be seniors in 2036.
A huge concern for Canadians is having enough money in retirement. According to the OECD data, 45% said they would increase spending on pensions, even if it means taxes will rise and some other programs may be cut. The same number of respondents said they disagree or strongly disagree that the government would provide adequate income support in the case of income loss due to old age.
Canadians are not only concerned about government support as they age. The majority (57%) of Canadians want the government to do more to ensure their economic and social security, while just 5% think the government should do less and 30% think the government should do the same.
A large number of Canadians (69%) also agree or strongly agree that the government should tax the rich more than they currently do in order to support the poor. However, the data suggests Canadians aren’t happy for everyone to receive government support, with almost 60 percent of respondents reporting they think many people receive public benefits without deserving them. When asked about their own access to benefits, around half that number (34%) agree or strongly agree they could easily receive public benefits if they needed them.
Susannah Binsted is the international PR manager at Finder. Susannah has a Bachelor of Communication and a Bachelor of International Studies from the University of Technology Sydney.
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