More than one-third of working Canadians are financially stressed, according to new National Payroll Institute research. That's a 20 per cent jump since last year.
The annual survey, conducted through Canada's Financial Wellness Lab, reached a sample of 1,500 working Canadians between July 21 and Aug. 1. The findings put 37 per cent in the "financially stressed" category amid rising costs and dwindling pandemic-era savings.
"With interest rates, inflation, and the cost of living all continuing to rise, for many working Canadians, navigating these factors has negatively impacted their financial wellness," National Payroll Institute president Peter Tzanetakis stated in a news release on Tuesday. "The frightening reality of this storm is that the contributing factors to financial stress are becoming more challenging than ever for Canadians to overcome."
Households had been sheltered by historically low borrowing costs, as well as money squirrelled away during COVID-19 lockdowns, according to the researchers. Now, they say saving is more challenging than at any point during the past decade, with 63 per cent of those surveyed saying they spend all of their net pay. Thirty per cent say they spend more than what they make, tapping credit or savings to get by.
Among the financially stressed, researchers found 66 per cent live paycheque-to-paycheque, with half saying they are "overwhelmed by their debt." More than half (55 per cent) say they "feel more isolated due to the rising cost of living."
"These results underscore how serious the storm is," Tzanetakis added.
For 40 per cent of financially stressed respondents, the research found their circumstances negatively impacted their job performance through lower productivity and engagement.
A similar study last year by the National Payroll Institute and the Financial Wellness Lab of Canada found the financial well-being of Canadians had "declined steeply" at the time, with paycheque-to-paycheque living up 26 per cent over 2021.
“The 15th Annual National Payroll Institute Survey of Working Canadians: An online survey of 1,500 working Canadians (81 percent of whom are full-time employees) was completed between July 21, 2023, and August 1, 2023, using Framework Analytics’ online panel. The panel is continually tested to ensure validity by comparing survey results to what has been measured in censuses, household studies conducted by statistical agencies and other reliable data sources. The survey is consistent with a margin of error of plus or minus 2.5% 19 times out of 20, but as a non-probabilistic methodology was used, a definitive margin of error cannot be expressed. The data was weighted to be representative.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.