COVID-19: Over 40% of Canadians not financially prepared to deal with second wave
Forty-two per cent of Canadians feel they are not in a strong enough financial position to handle the challenges of the second wave of COVID-19, according to the findings of the newly released FP Canada survey, Coping with COVID's Financial Impact survey.
Forty-one per cent of survey respondents stated that they already feel that they're in a worse financial situation today than they were before the pandemic began with more than one-third saying they have already had to draw from personal savings or take on new debt to make up for money shortfalls and cover expenses. Thirty per cent said they are concerned they will not financially recover from the crisis.
However, the survey showed that those Canadians who work with a financial planner were substantially more likely to report they're confident about their financial well-being at the onset of the COVID-19 pandemic (77%) and throughout it (74%) than those who don't use a planner (57% and 57%, respectively). They are also much more likely to worry less about the impacts of the second wave of COVID-19 (68% vs 50%).
Sandwich generation hit hardest
The FP Canada survey found that Canadians aged 45-54 are struggling the most during this pandemic. Thirty-six 36% of respondents in the sandwich generation — those in their 40s and 50s raising children while also caring for aging relatives — saying they don't believe they'll recover from the financial strains of the pandemic. Forty-six per cent said they were in a strong enough financial position before and throughout (47%) the pandemic to avoid concerns about their financial health.
Fifty-one per cent of the 18-34-year-olds polled say they'd taken advantage of a government subsidy or private-sector deferral program, including 29% who relied on the Canada Emergency Response Benefit. Half of younger Canadians polled say they've borrowed money to make up for financial shortfalls, with 15% turning to family for funds.
"It is alarming to see the significant pain COVID-19 has inflicted on the finances of Canadians. It's also clear that many people are not prepared to endure this continued crisis," said Tina Tehranchian, Certified Financial Planner, based in Toronto. "While younger Canadians are experiencing an outsized financial impact from the pandemic, it appears that the sandwich generation may be in the worst position. It's clear that regardless of age or location, Canadians who have turned to a professional financial planner have had more peace of mind throughout the challenges of this year."