A new survey has found that Canadians are starting to get serious about our rising debt levels and that we want to start paying it back. But as we do, we also want advice and help from the experts, and that’s why so many are turning to their local banks for help.
The survey, which questioned 1,200 Canadians last December, showed that when it comes to our home equity lines of credit in Canada and other loans such as Sudbury mortgages, an overwhelming majority – 82% – seek advice from our bank. Canadians turn to banks, not for more money to pay down their debt, but for advice on what a reasonable debt level is for them, how to pay it off sooner, and other options to avoid taking on too much debt in the first place. For all the warnings Jim Flaherty and Mark Carney have been giving us, it’s a good start.
The survey also questioned Canadian retirees and the results showed that 58% of retired individuals still carry at least some debt during retirement. 40% said that they currently held less than $100,000 while 15% said that they had between $100,000 to $250,000 owing in debt. One reason for this, says John MacKinlay, leader of PwC is that Baby Boomers are more comfortable using credit cards and taking on debt than any other generation before them. “We used to believe when you retire you shouldn’t have significant debt, but Boomers are more comfortable carrying deb,” he said. “Historically, you wouldn’t have seen these levels of debt or these attitudes to debt in the retiree population that we seem to be seeing in the marketplace today.”
As for those in their working years (aged 25 to 55,) the survey showed that while 41% of us think our debt levels are too high, a higher majority of 63% said that we want to decrease the amount of debt we have. In order to do that, 70% of people said that they would put off the purchase of a new car (up from 64% last year,) and 62% said that they would delay upgrading to a larger house. “Consumers are starting to get it,” says Andrew Smee, a consumer lending representative with PwC, “that they need to actively change their lifestyle to pay off their debt.”
Lastly, the survey also took into consideration why we wanted to pay off our debt. While a small majority of 47% admitted that it was from fear of never being able to pay it back, 46% said that it was due to the economy and 33% said their desire to pay off their debt was due to instability in the financial markets.
