Many Canadians were financially unprepared for the pandemic
One-third of Canadians were financially unprepared for COVID-19, more than three-quarters say their mental health has been hurt by the pandemic and two-thirds of those who don’t own a home now worry about saving for one, according to a new debt survey from Manulife Bank.
On average, Canadians have been allocating nearly half of their income to essentials like food and housing since COVID-19 began, and 58 per cent of homeowners and 54 per cent of renters worry about making their payments.
Many getting priced out of the housing market
About 36 per cent of respondents said they worry significantly about saving for a home, suggesting that many are getting priced out or on the verge of getting priced out of the market. Many Canadians are also concerned about supporting their children through post-secondary education (28 per cent) or saving for retirement (28 per cent).
“It’s so important to have financial flexibility, especially when one looks at purchasing a home – it’s easy to feel stressed,” said Rick Lunny, president and CEO, Manulife Bank. “Financial conversations are essential to identify opportunities, what matters most and help you stay on track, no matter the financial environment.”
One-third (35 per cent) of Canadians admit they were financially unprepared for the pandemic. Nearly three-quarters (74 per cent) acknowledge their financial situation has been affected as a result of the pandemic and more than two-thirds (69 per cent) within that group say the impact has been overall negative. In fact, of those respondents, 42 per cent think it may take them more than a year to recover to pre-COVID-19 levels.
Layoffs hurt bottom line
In addition, one in six Canadians has been laid off due to COVID-19, with equally as many saying they would have been laid off had it not been for the wage subsidy provided by the government.
Survey results show the pandemic has taken a toll on the mental well-being of Canadians. Almost half (46 per cent) of indebted Canadians say debt is having a negative effect on their mental health – a 10-point increase from two years ago.
“The COVID-19 pandemic is causing many Canadians to experience higher levels of anxiety and fear. Debt is amplifying that, making us feel more vulnerable to uncertainty,” said Dr. Georgia Pomaki, leader, Mental Health Specialists at Manulife. “One way of strengthening our resilience and sense of security is to think about how we can better prepare ourselves for unforeseen expenses, which will allow us to respond more effectively to issues as they arise.”