Debt levels of working Canadians continue to “remain high” as more than a third (35%) feel overwhelmed by their level of debt, according to a recent survey by the Canadian Payroll Association.
Some 31% of respondents say their debt load increased over the year. Those who believe it will take more than 10 years to pay down their debt has risen to 42% (versus 36% in 2016). About 12 % said they will never be debt free. Data were drawn from a survey of 4,766 employees from a different inustryt sectors across Canada, from 27 June to 5 August.
Results also found a low rate of saving, as 4 in 10 employees (41%) spend all of or more than their net pay. The number-one reason given for increased spending is higher living costs. Four in 10 (42%) also said hey save 5% or less of their earnings, below the 10% savings level generally recommended by financial planning experts. Nearly a quarter (22%) admitted they could not come up with just $2,000 within a month for an emergency expense.
"These results underscore the need for spending less and saving more every day, for emergencies and for retirement," said Janice MacLellan, the association’s vice-president of operations. "They also show that it is very difficult for people to change or reduce their spending patterns.”
An overwhelming majority (94%) of the respondents carry debt. The most common forms were mortgages (28%), credit cards (17%), car loans (18%) and lines of credit (17%). The association said more respondents than ever find mortgages on principal residences the most difficult debt to pay down, with 32% of respondents selecting this option. “For the first time in the survey's nine year history, mortgages surpassed credit card debt (23%) as the most difficult to pay down.”
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate