The new TransUnion report reveals that rising prices stifle the optimism of Canadians’ personal finances

Transunion
Transunion

More than half of Canadians (56%) surveyed report that concerns about inflation and interest rates affect buying behavior despite current positivity

Key findings from TransUnion’s Consumer Pulse study in Q1 2022:

  • 56% of Canadians said they were “very concerned” about the inflation rate and associated impacts

  • 60% indicated that their current family finances are as planned or better in the first quarter of 2022

  • 54% reported feeling unsure of households’ financial prospects over the next 12 months

  • 46% indicated that they reduce discretionary spending

  • One in four (25%) reported that they did not expect to be able to pay at least one of their current bills and / or loans in full

  • 53% indicated that rising interest rates impacted their approach to applying for credit

TORONTO, April 19, 2022 (GLOBE NEWSWIRE) – TransUnion’s most recent Consumer Pulse study * shows that while most Canadians feel positive about their current personal finances as the economy continues to reopen, concerns over pressure Long-term macroeconomics are casting a shadow over their optimism.

“Canadian households accumulated savings during the pandemic,” said Matt Fabian, director of financial services research and advisory at TransUnion. “As the impact of the pandemic continues to diminish, we expect consumers to distribute these savings towards deleveraging, wealth management and increased household spending. But for now, concerns about inflation and interest rates are fueling a sense of concern and hesitation. ”

Canadians feel positive about their current financial situation but are concerned about the future: The latest Consumer Pulse Survey showed that 60% of Canadians believed their finances were the same or better than expected in the first quarter of 2022. This may be partly due to government subsidies to support families during the pandemic, as well as to the reduction of the debt of the lender. Overall, 19% reported family income increased over the last quarter, versus 54% who said it stayed the same and 28% said it decreased. However, looking ahead, more than half (54%) indicated that they did not feel so optimistic about their family’s finances in the next 12 months.

Future outlook tainted by inflation and rising cost pressures: When it comes to the long-term outlook for the next 12 months, most Canadians’ outlook is tainted as concerns about inflation and affordability grow. This is despite 52% of Canadians expecting family income to stay the same and 35% expecting it to increase over the next year. More than half (56%) of Canadians said they were “very concerned” about the rate of inflation and its impact on the financial perspective. These concerns impacted shopping behavior for 56% of Canadians.

Canadians in ‘wait and see’ mode to access or refinance new credit: Many Canadians appear to be in “wait and see” mode when it comes to accessing credit, with 78% saying they have no current plans to apply for a new credit or refinance existing credit. More than half (53%) of Canadians said that rising interest rates affected applying for credit or waiting. For some, the worry of getting credit approved because of their income or employment status has made them more reluctant to apply. Despite lower demand for credit, 81% of Canadians agreed that access to credit is important. Among Canadians planning to apply for a new credit or refinance existing credit:

  • 45% plan to apply for a new credit card

  • 28% plan to apply for a new personal loan

  • 21% plan to apply for a new mortgage, home loan, or bond payment

Canadians embrace a cautious outlook on spending: Consumers are willing to spend a little more on discretionary items; however, many Canadians are holding back spending and taking a more conservative approach overall.

  • 46% of Canadians reported reducing discretionary spending (such as dining out, travel, entertainment), versus 9% who increased discretionary spending

  • 20% of subscriptions / subscriptions canceled, versus 7% who added subscriptions or subscriptions

  • 15% canceled or reduced digital services, compared to 8% added or expanded digital services

Canadians take a conservative approach to debt and savings management: Many Canadians reported increasing their savings and focusing on paying off debt, while, conversely, a smaller percentage reported increasing available credit and / or using their retirement savings to help manage the flow of money. cashier.

  • 19% of Canadians reported saving more in emergency funds

  • 18% said they paid off their debt faster

  • 13% more use of available credit

  • 10% more saved for retirement

  • 9% of retirement savings used

Most Canadians feel confident they can pay their bills, but one in four report being in trouble: When it comes to being able to pay bills, 75% of Canadians reported that they expect to be able to pay their current bills. However, one in four Canadians (25%) said they expect not to be able to pay at least one of their current bills or loans in full.
Of these Canadians:

  • 20% said they will borrow money from friends or family to pay their bills or loans

  • 12% said they will use the savings money

  • 7% said they will use unemployment benefits

“Although pandemic restrictions have eased across the country underpinning Canada’s economic recovery, Canadians are suffering the shockwaves of supply chain disruptions and inflation-driven price increases,” Fabian said. “Last but not least, the rising cost of food and skyrocketing prices. There is no doubt that these macroeconomic concerns are fueling a conservative “wait and see” approach when it comes to spending and credit behavior among many consumers.

TransUnion’s COVID-19 support center provides useful information to consumers concerned about their ability to pay bills and loans. The full Consumer Pulse study can be viewed here.

* The most recent Consumer Pulse study includes a survey of 1,069 Canadian consumers conducted between February 14-17, 2022.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company that makes trust in the modern economy possible. We do this by providing a complete picture of each person so that they can be reliably and safely represented on the market. As a result, businesses and consumers can transact with confidence and achieve great results. We call this information for good .® TransUnion provides solutions that help create business opportunities, great experiences and personal empowerment for hundreds of millions of people in more than 30 countries. Our customers in Canada include some of the nation’s largest banks and card issuers, and TransUnion is a leading provider of credit reporting, fraud and analytics solutions in the financial, retail, telecommunications, utilities, government and insurance industries.

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