The financial fallout of the COVID-19 pandemic has been particularly cruel toward savings strategies, retirement plans, and incomes—with no generation spared. According to an FP Canada survey, this uncertainty has left nearly one-third (30%) of Canadians feeling concerned they will not financially recover from the crisis.
More than one-third (36%) of Canadians in their 40s and 50s who raise children and care for aging relatives say they don’t believe they will recover from the financial difficulties brought on by the pandemic. Only 46% of this segment say they were in a strong financial position before the crisis to avoid concerns.
Furthermore, the study suggests the worst may be yet to come for younger Canadians. More than half (51%) of those aged 18-34 say they have taken advantage of government subsidies or payment deferral programs. However, as these programs end, younger Canadians may find it challenging to cover costs. So far, half of younger Canadians surveyed admitted to borrowing money, with 15% asking family for help.
These concerns will continue to weigh on Canadians throughout the December holidays, with 52% of those polled saying they will spend less on gifts this year to avoid further financial strain.
“With the holiday season around the corner, it’s not surprising to see people watching their discretionary spending this year,” said Caval Olson-Lepage, CFP, in a release. “This rings true across the nation and all age demographics, highlighting the severity of Canadians’ financial situations and the high degree of caution they’re exercising as they continue to cope with the pandemic. Many have taken from their savings or accumulated more debt during this pandemic, so buying an abundance of gifts is unlikely to take priority over managing everyday expenses. The holidays may not be the most wonderful time of year for some people as a result.”
This survey echoes the results from a similar study by Chartered Professional Accountants of Canada (CPA Canada) from late October.
Key findings suggest nearly a third (31%) of the population is dealing with a decrease in income due to the pandemic. Another 30% of those surveyed report the crisis has impacted the amount they are saving.
Additionally, COVID-19 is altering how people are choosing to spend their money. Over half of the participants (55%) say they are spending less on average.
“This is a challenging time for many Canadians and it is never too late to start paying closer attention to your finances and to seek information to help guide your decision making,” adds Doretta Thompson, CPA Canada’s Financial Literacy Leader in a release. “Taking action today can position you for a better tomorrow when it comes to your finances.”
Facing financial hardships
Many Canadians are facing financial hardships during these unpredicted times. However, those who are up against challenges are not alone. Numerous businesses and programs may be able to offer assistance or relief.
The Government of Canada website is an excellent resource for finding financial aid measures, subsidies, and support programs.
Being prepared and seeking help may make the road to recovery smoother and the transition to better times within your control.