Around 43% of Canadians who have debt added to it as a result of the pandemic, BDO’s 2021 affordability index suggests.
The results of BDO’s online survey, conducted by Angus Reid, suggested that 26% of Canadians incurred at least one new kind of debt during the pandemic. Further, 70% of respondents said the new debt adversely affected their standard of living. Only 51% felt confident they would be able to re-establish their pre-pandemic standard of living.
Of the people who said their debt had increased, 70% said the primary reason was the rising cost of living. Overspending was not a significant factor. In fact, overspending as a reason for accumulating more debt fell by 15% compared to 2020. Credit card debt was the most common type of new debt.
To manage debt incurred over the past 19 months, around 64% of Canadians surveyed scaled back their non-essential spending. Further, 47% re-jigged their budgets and 30% sold their possessions.
Canadians also reported building less wealth during the pandemic, with 42% saying they’re saving less or not at all. (Three in 10 said they’re saving more.) Reasons included an increase in spending on essentials (57% — an increase of 13% from 2020) and reduced income or job loss.
The economy is also affecting Canadians’ retirement plans, the index suggested. Sixty percent of those surveyed noted they’re “not on track” to retire. Among the 55+ demographic, 30% stated they are “very far behind” in saving for their retirement.
On a more immediate basis, 23% of respondents found it difficult to put food on the table, up by 4% from 2020. About three in 10 respondents said paying for utilities was a challenge, while 35% said the same about the cost of transportation and clothing.
The Angus Reid online survey was in the field from Sept. 1 to Sep. 7 and had 2,015 respondents. The margin of error was +/- 2.2%, 19 times of out 20. Discrepancies in or between totals are due to rounding.