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Special Reports

 

RBC poll finds that many Canadians not financially prepared for an economic downturn

TORONTO, May 21, 2008 — Despite the current volatile economic environment, only a quarter (22 per cent) of Canadians are saving more than they did before, according to a new Account Habits poll released today by RBC. In fact, 43 per cent of respondents are maintaining their current spending habits while one fifth (20 per cent) are spending more.

"One need only look at the newspapers or television to see that North America is in an economic downturn," said Ashif Ratanshi, senior vice-president, RBC Branch Investments and Banking. "This is the time for Canadians to re-assess their own finances and ensure they are effectively managing their money so that they can withstand any sudden pitfalls or changes in their lives."

One of the poll's key findings was that on average most Canadians do not believe they are good savers. In fact, the majority (83 per cent) are worried they don't have enough money saved, and 86 per cent feel that they can't save as much as they would like. Less than one half of Canadians (49 per cent) have a rainy day account set up for an emergency. Of those that do, 55 per cent have only enough saved to cover one-month's worth of expenses, while 24 per cent have three-month's worth of expenses covered.

Many Canadians are also not prepared to cope with an unexpected long-term emergency or sudden life-changing event. Surprisingly, sixty-five per cent of respondents consider their line of credit and credit cards to be their backup in case of an emergency, while 60 per cent of the more than one million Canadians who keep $1,000 or more in their bank account each month, consider that money to be their safety net.

Even though the poll found that being financial prepared for an emergency is a priority for many Canadians, it only ranks fifth out a list of nine priorities. In fact, Canadians rank saving for retirement, paying down debt, paying down one's mortgage faster and saving for children's education ahead of saving for an emergency. As well, a third of respondents agreed that they do a poor job at putting money aside for these priorities.

So how do Canadians spend their pay check? Almost two-thirds (63 per cent) allocate some towards household bills, rent/mortgage and other regular monthly purchases and the rest goes to savings; 34 per cent spend it all on living expenses like bills; rent/mortgage and food with nothing left over; and only three per cent are able to put their entire salary into savings.

"In looking at the results from the poll, it is clear that many Canadians need to make a plan or budget to help them achieve their financial priorities," said Mr. Ratanshi. "Small changes such as finding the right bank account, paying off debt quickly or arranging for monthly withdrawals into a GIC or other investment can help Canadians optimize their savings."

These are some of the findings of an RBC poll conducted by Ipsos Reid between March 13 and March 18, 2008. This online survey of 2,020 adult Canadian bank account holders was conducted via the Ipsos I-Say Online Panel, Ipsos Reid's national online panel. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data.

- 30 -

Media Contact:
Beja Rodeck, 416-974-5506

For full tabular results, please see the Ipsos Reid website at www.ipsos.ca.


 



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05/21/2008 08:06:54