New TransUnion Report Finds Rising Prices Quell Canadians’ Personal Finance Optimism

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More than half of Canadians (56%) surveyed report that concerns about inflation and interest rates affect purchasing behavior despite current positivity

Key Findings from TransUnion’s Q1 2022 Consumer Pulse Study:

  • 56% of Canadians reported being “very concerned” about the rate of inflation and associated impacts.
  • 60% indicated that their current family finances are on track or better in the first quarter of 2022
  • 54% reported that they do not feel confident about the financial prospects of households in the next 12 months.
  • 46% indicated that they are cutting discretionary spending.
  • One in four (25%) reported that they do not expect to be able to pay at least one of their current bills and/or loans in full
  • 53% indicated that rising interest rates affect their approach to applying for credit

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TORONTO, April 19, 2022 (GLOBE NEWSWIRE) — TransUnion’s latest Consumer Pulse* study shows that while most Canadians feel positive about their current personal finances as the economy continues to reopen, concerns about long-term macroeconomic pressures are dissipating. a shadow on his optimism.

“Canadian households have been building up their savings during the pandemic,” said Matt Fabian, director of research and consulting for financial services at TransUnion. “As the impact of the pandemic continues to subside, we expect consumers to spread these savings toward credit deleveraging, wealth management and increased household spending. But for now, concerns about inflation and interest rates are fueling a sense of worry and hesitation.”

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Canadians feel positive about their current financial situation, but are worried about the future: The latest Consumer Pulse Survey showed that 60% of Canadians felt their finances were equal to or better than planned in the first quarter of 2022. This may be due in part to government subsidies supporting households during the pandemic, as well as well as debt relief from lenders. Overall, 19% reported that their household income increased since the last quarter, compared to 54% who said it stayed the same and 28% who said it decreased. However, looking ahead, more than half (54%) indicated that they do not feel as optimistic about their household finances over the next 12 months.

Future Outlook Colored by Inflation and Cost-Increase Pressures: When it comes to the longer-term outlook over the next 12 months, most Canadians’ outlook is flawed as concerns about inflation and affordability mount. This is despite the fact that 52% of Canadians expected their household income to stay the same and 35% expected it to increase over the next year. More than half (56%) of Canadians said they are “very concerned” about the rate of inflation and the associated impact on their financial prospects. These concerns affected the purchasing behaviors of 56% of Canadians.

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Canadians in ‘wait and see’ mode to access or refinance new credit: Many Canadians seem to be in a ‘wait and see’ mode when it comes to accessing credit, with 78% saying they have no current plans to apply for new credit or refinance existing credit. More than half (53%) of Canadians said rising interest rates affected whether they applied for credit or waited. For some, concern about getting credit approved because of their income or employment status made them more reluctant to apply. Despite lower demand for credit, 81% of Canadians agreed that access to credit is important. Among Canadians who planned to apply for new credit or refinance existing credit:

  • 45% planned to apply for a new credit card
  • 28% planned to apply for a new personal loan
  • 21% planned to apply for a new mortgage, home loan, or bond payment

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Canadians take a cautious view on spending: Consumers are willing to spend a little more on discretionary items; however, many Canadians are holding back on spending and taking a more conservative approach overall.

  • 46% of Canadians reported reducing discretionary spending (such as dining out, travel, entertainment), versus 9% who increased discretionary spending
  • 20% canceled subscriptions/memberships, vs. 7% who added subscriptions or memberships
  • 15% of digital services canceled or reduced, versus 8% of digital services added or expanded

Canadians take a conservative approach to managing their debt and savings: Many Canadians reported increasing their savings and focusing on paying down debt, while a smaller percentage reported increasing available credit and/or using their retirement savings to help manage cash flow.

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  • 19% of Canadians reported saving more on emergency funds
  • 18% said they paid off debt faster
  • 13% increase in the use of available credit
  • 10% saved more for retirement
  • 9% used retirement savings

Most Canadians are confident they can pay their bills, but one in four report struggling: When it comes to being able to pay bills, 75% of Canadians reported that they expect to be able to pay their current bills. However, one in four Canadians (25%) said they expect to be unable to pay at least one of their current bills or loans in full.
Of these Canadians:

  • 20% said they will borrow money from friends or family to pay their bills or loans.
  • 12% said they will use money from savings
  • 7% said they will use unemployment benefits

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“Although pandemic restrictions have been relaxed across the country and support Canada’s economic recovery, Canadians are feeling the shock waves of supply chain disruptions and inflation-driven price increases,” he said. Fabian. “Not least: rising food costs and sky-high prices at the pumps. There is no doubt that these macroeconomic concerns are fueling a conservative ‘wait and see’ approach to spending and credit behavior among many consumers.”

TransUnion’s COVID-19 Support Center provides helpful information for consumers who are concerned about their ability to pay bills and loans. The full Consumer Pulse study can be viewed here.

*The latest Consumer Pulse study includes a survey of 1,069 Canadian consumers conducted between February 14-17, 2022.

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About TransUnion (NYSE: TRU)

TransUnion is a global information and knowledge company that enables trust in the modern economy. We do this by providing a complete picture of each person so that they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.® TransUnion offers solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people in more than 30 countries. Our customers in Canada include some of the nation’s largest banks and card issuers, and TransUnion is a leading provider of credit reporting, fraud and analytics solutions in the finance, retail, telecommunications, utilities, government and banking industries. insurance.

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