Despite wage increases, more than half of Canadians say that their incomes are failing to keep up with inflation
Sustained pressures from recent inflation levels and rising interest rates have forced most Canadians to cut their miscellaneous spending, according to a new poll by TransUnion.
The most notable cutbacks were on discretionary spending (54%), digital services (21%), and subscriptions or memberships (26%), the survey noted.
More than half (55%) of respondents said that their incomes are still failing to keep up with inflation, despite reported wage increases for 24% of Canadians and likely increases for 34%. Another 43% said that their finances are worse than they expected.
“Macroeconomic pressures remain top-of-mind for many,” said Matt Fabian, director of financial services research and consulting at TransUnion Canada. “Concerns around inflation, rising interest rates, housing affordability, and the perceived threat of a potential recession are affecting how Canadians are managing their household finances.”
More than one third (34%) of respondents said that they are buttressing their savings against a possible recession, while 36% indicated a belief that Canada is already in a recession.
“Canadians are taking a prudent approach in managing their finances in the face of economic uncertainty, including reining in spending, stockpiling savings, and managing their debt levels,” Fabian said. “Not just in view of today’s financial challenges – but in preparing for what’s ahead.”
However, only 42% of Canadians were found to be optimistic about their finances over the next 12 months, while 31% harbor more negative sentiments toward their financial outlook.
