Canadians Feel They Are in Better Debt Shape than Their Friends and Neighbours: RBC Poll
Younger Canadians feel most anxious about debt and are most likely to delay plans
TORONTO, September 14, 2011 Three-quarters of Canadians (75 per cent) feel they are in better shape with their non-mortgage debt than their friends and neighbours and more than half (58 per cent) say they are happy with their current total debt situation, according to a new RBC Debt Poll.
When asked to rate how they feel about their personal debt situation, 67 per cent of Canadians are either comfortable (45 per cent) or have no personal debt at all (22 per cent). An overwhelming majority (93 per cent) see paying down debt as more or just as important as saving for the future.
"The majority of Canadians feel confident that they are in a better debt position than everyone else but the reality is that effectively managing credit takes discipline and proper planning," said Richard Goyder, vice-president, Personal Lending, RBC. "Taking a realistic look at your financial situation, along with planning ahead, spending within your means and getting the right type of financial advice are the keys to managing debt."
Some Canadians are also cautious about adding to their debt loads, with four-in-ten (39 per cent) saying that they have cancelled or delayed plans of some kind because of concern about their financial situation. Nearly a quarter of Canadians have postponed a vacation (24 per cent) and 20 per cent are holding off on big-ticket purchases or an expensive item for their home.
The poll reveals that age and anxiety levels are closely-linked when it comes to Canadian opinions on debt, as differences emerge depending on age and whether or not people had children. Across all age groups, "paying down debt now" was seen as very important, with anxiety about debt highest (39 per cent) among Canadians aged 18-34. This level drops drastically to 21 per cent among older Canadians who are 55 and over.
"Younger Canadians are more worried about debt, as they are earning less and may have accumulated debt either due to student loans, the purchase of their first home or car, or starting a family," Goyder added. "Setting short and long-term financial goals based on your personal circumstances can help you stay on track to pay off debt and start saving."
Family composition is also a key factor affecting attitudes on debt, as Canadians with children were more likely to change vacation plans (30 per cent compared to the national average of 24 per cent), avoid buying an expensive item (26 per cent compared to the national average of 20 per cent) and delaying the purchase of a home (12 per cent versus the national average of eight per cent).
Canadian parents are far less happy about their debt situation than other Canadians (47 per cent compared to 61 per cent) and are far more likely to switch their spending intentions due to debt concerns (48 per cent compared to 37 per cent).
Highlights from across Canada:
Columbia: Half of B.C. survey respondents (50 per cent compared to the national average of 44 per cent) say saving and investing for the future is as important as paying down debt, the highest rate in the country. Almost two-fifths of B.C. residents (37 per cent) feel they are in "much better" shape, when thinking about their non-mortgage debt, compared to their friends and neighbours (compared to the national average of 34 per cent).
- Alberta: Alberta leads the country in feeling anxious about debt (36 per cent versus the national average of 32 per cent). Albertans are also the most likely to change their plans due to concerns about their debt situation and are more likely to delay or cancel plans to take vacation (28 per cent versus 24 per cent) and buy a new home (12 per cent versus eight per cent).
- Prairies: Saskatchewan and Manitoba are the most comfortable and happy with their personal debt situations when compared to other provinces (50 per cent and 62 per cent respectively compared to 45 per cent and 58 per cent nationally). Prairie residents also lead the country on not changing their plans due to debt concerns, well above the national average (66 per cent versus 61 per cent).
- Ontario: Responses from Ontario were similar to the national average across most measures. Ontarians were more comfortable than anxious about their current debt situation (43 per cent versus 33 per cent, respectively compared to 45 per cent feeling comfortable versus 32 per cent anxious nationally). Almost one-quarter (24 per cent) said they have no personal debt as compared to the national average of 22 per cent.
- Quebec: Quebecers are most likely to be concerned with paying down debt now rather than saving for the future (54 per cent versus the national average of 49 per cent). Over one-quarter of Quebecers (27 per cent) believe that they are in worse shape than their friends and neighbours for non-mortgage debt, tied with Alberta for the highest rate in the country (compared to the national average of 25 per cent).
- Atlantic Canada: Thinking about non-mortgage debt, Atlantic Canadians are the most optimistic about their debt situations compared to their friends and neighbours (82 per cent versus the national average of 75 per cent).
Age group highlights:
- 18-34: Younger Canadians feel the most anxious about their personal debt situation (39 per cent) and unhappy (52 per cent). They are also more likely to change their plans due to concerns about debt levels (50 per cent) well above the national average, including taking a vacation (30 per cent), buying a big-ticket item (25 per cent), buying a new home (16 per cent) and having children (12 per cent).
- 35-54: The middle bracket, particularly those with children, also showed a substantial level of anxiety about debt (37 per cent) and just under half (48 per cent) are unhappy about their debt situation (slightly lower than younger Canadians but much higher than older Canadians).
- 55+: This group was the most comfortable with their debt situation (45 per cent) and more than a third said they have no personal debt (34 per cent). The majority (83 per cent) feel they are in better shape than their friends and neighbours and three-quarters (75 per cent) are happy about their debt levels.
All Canadians can visit the RBC Advice Centre www.rbcadvicecentre.com for guidance on how to handle their debt. Interactive tools and calculators provide customized information covering all facets of saving and using credit. For RBC personal banking clients, a new online financial management tool, myFinanceTracker, is available at no cost to create a set budget and track their spending habits.
The RBC Debt Omnibus Study was conducted by Ipsos Reid. Data was collected from August 18 to 23, 2011. The online survey is based on a randomly selected representative sample of 2,011 adult Canadians that was statistically weighted by region, age and gender composition according to the Census data. The results are considered accurate to within ±2 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population.
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For more information, please contact:
Ka Yan Ng, RBC Communications, (416) 974-1794
Matt Gierasimczuk, RBC Communications, (416) 974-2124