One third of Canadians feel they’ll never financially recover from the COVID-19 pandemic
Canadians working with a financial planner say they are much more confident about their financial health than those who are not
TORONTO — The COVID-19 pandemic has had a dramatically negative impact on the financial health of Canadians, with nearly one third (30%) concerned they will not financially recover from the crisis, according to the findings of the newly released FP Canada Coping with COVID’s Financial Impact survey.
The survey revealed that 42% of Canadians feel they are not in a strong enough financial position to handle the challenges of the second wave of COVID-19. Nearly as many (41%) confirm that they already feel that they’re in a worse financial situation today than they were before the pandemic began. More than one third say they have already had to draw from personal savings or take on new debt to make up for money shortfalls and cover expenses.
“It is alarming to see the significant pain COVID-19 has inflicted on the finances of Canadians. It’s also clear that many people are not prepared to endure this continued crisis,” said Tina Tehranchian, certified financial planner, in a prepared statement. “While younger Canadians are experiencing an outsized financial impact from the pandemic, it appears that the sandwich generation may be in the worst position. It’s clear that regardless of age or location, Canadians who have turned to a professional financial planner have had more peace of mind throughout the challenges of this year.”
Canadians with a plan say they’re much more confident than those without
Working with a financial planner helps people navigate unforeseen circumstances and better prepare for the future, and that has held true during the COVID-19 pandemic. Respondents who say they use the services of a financial planner were substantially more likely to report they’re confident about their financial well-being at the onset of the COVID-19 pandemic (77%) and throughout it (74%) than those who don’t use a planner (57% and 57%, respectively). They are also much more likely to worry less about the impacts of the second wave of COVID-19 (68% vs 50%).
Sandwich generation and younger Canadians bearing the brunt of COVID-19
Canadians aged 45-54 are struggling the most during this pandemic, with 36% of respondents in the sandwich generation — those in their 40s and 50s raising children while also caring for aging relatives — saying they don’t believe they’ll recover from the financial strains of the pandemic. Less than half say they were in a strong enough financial position before (46%) and throughout (47%) the pandemic to avoid concerns about their financial health.
At the same time, the survey results suggest the worst may be yet to come for younger Canadians. More than half (51%) of the 18-34-year-olds polled say they’d taken advantage of a government subsidy or private-sector deferral program, including 29% who relied on the Canada Emergency Response Benefit. Because a number of key economic stimulus and support programs have come to an end, those who needed government assistance the most may be forced to look for other ways to make ends meet. Already, half of younger Canadians polled say they’ve borrowed money to make up for financial shortfalls, with 15% turning to family for funds.