It's the highest level in 12 years and pessimism about the future is clear
Managing a household budget is a significant challenge for many Canadians with inflation surging.
A new survey from Angus Reid Institute highlights the extent of the struggles with 45% of respondents saying they are worse off now than a year ago, the highest level in 12 years.
Those with the lowest household incomes are most likely to say that their finances are worse now (51% among the less than $25,000pa cohort), but this is shared by at least 4 in 10 of all groups, except those on $200K+ where the figure is 30%.
Just 22% are optimistic of things improving, one third believe that their situation will be worse still in a year from now, and 36% think it will be the same.
With inflation at its highest rate since the early 1980s, putting food on the table is challenging for half of respondents, and while spending on gas is up for one third, half are spending less due to using alternative transportation.
Cost of living is the top provincial issue, with 77% saying their province has not handled inflation well. Healthcare and housing costs complete the top 3 provincial issues.
Angus Reid’s Economic Stress Index finds that 25% are struggling, 25% are uncomfortable, 29% are comfortable, and 21% are thriving.
Mortgage rates
Among homeowners, one in five are already making higher monthly mortgage payments due to interest rate rises and 53% expect their payments to rise.
One third of homeowners with a mortgage said that it is tough or very difficult to afford their payments.
Asked about their ability to cope with a $150 rise in their monthly mortgage payment, 35% said they couldn’t handle it. If payments were hiked by $300 a month, two thirds would have to make some major changes in their finances or could simply not afford the increase.
Renters are also under pressure with 52% expressing difficulty in affording their rent.
Credit cards
The survey found that 38% of respondents have credit card debt, but among those struggling (as defined by Angus Reid’s Economic Stress Index) this rises to 62%.
Of those in the struggling group, 58% say it will take them more than one year to pay off their credit card debt.
