A significant number of Canadians who hold debt say they’d struggle to cope if they lost their jobs or had to cover emergency expenses, according to new TD Insurance research.
The study finds 39% of those polled have no idea how they would pay for their bills and other expenses if they lost income for six months. Most alarmingly, that figure rose to 44% for those under the age of 35.
That’s mainly because almost 70% of respondents have either “some” or “a lot” of debt. Also, most of those with “some” debt (60%) aren’t sure what they’d do to pay bills in the event of health emergencies.
“Personal circumstances, particularly loss of income due to critical illness, are often completely unpredictable,” says Anna Kavanagh, vice president at TD Insurance.
On average, most polled said they’d need $45,609 in savings to cover all expenses over the course of one year without income. That’s just below the current national average for pre-tax salary, as reported by Statistics Canada.
Those with children reported they would need an average of $53,438, though both amounts vary depending on which province in which people reside.
It’s important for clients to build up savings and obtain proper coverage, the study suggests, since one-in-two men and one-in-three women in Canada could suffer a critical illness before age 65.