New Data Indicates COVID-19 Financial Impact on Canadians Turning a Corner

Rhea-AI Summary

TransUnion's recent study highlights a significant shift in Canadian consumers' financial mindsets due to COVID-19. The survey shows that 55.1% of respondents feel negatively impacted, a decrease from 58% the previous week. Furthermore, only 15% expect their household income to decline, the lowest since the survey's inception. Notably, 67% remain concerned about paying bills, but the proportion who can maintain payments for 1-3 months fell to 43%. Gen Z is the hardest hit, with 69% reporting negative impacts. Consumers are adapting spending habits, opting to preserve cash flow through partial bill payments and dipping into savings.

Positive

• Decline in percentage of consumers negatively impacted by COVID-19 to 55.1%, from 58% the previous week.
• Household income concerns drop to 15%, the lowest since the survey began.
• Consumers adapting financial strategies, showing resilience in managing budgets.

Negative

• 67% of consumers still concerned about their ability to pay bills.
• Increase in consumers unable to maintain bill payments for less than two weeks, rising from 9% to 13%.
• Gen Z shows the highest negative impact at 69%, indicating financial strain among younger demographics.

TORONTO, June 10, 2020 (GLOBE NEWSWIRE) -- TransUnion’s latest weekly study looking at the impact of COVID-19 on consumer finances in Canada, reveals consumers’ shifting mindset from panic to preparedness. The survey of 1,078 adults conducted on the week commencing June 1, 2020, reveals that consumers are adjusting to a new normal around their budgeting, and that government support and bank forbearance programs continue to provide financial relief.

Consumer mindset shifting from panic to preparedness
The proportion of consumers saying they are negatively affected by COVID-19 has dropped to 55.1% (down from 58% the week prior and 57% in Week #1 over two months ago) representing the lowest rate since the survey started at the end of March. The percentage of Canadians who expect their household income to be negatively impacted is also the lowest since the inception of the survey at 15%, compared to 19% the week prior and 24% in Week #1.  

Canadians changing money patterns to better manage cash flow
The data shows that the impact of the crisis is fundamentally shifting household budgets.  Canadians who indicated they have been negatively impacted are using unemployment benefits or other government subsidies, as well as paying less down against existing debt to preserve cash flow. Specifically, more than 1 in 3 affected consumers (35%) indicated a preference paying only the partial amount of bills they can afford. Canadians are dipping into investment and retirement funds at an increased rate, with 31% of those impacted using money from TFSA or RRSP accounts (compared to 22% the week prior and only 10% in Week #1). Negatively impacted consumers also indicate cutting back on savings and investments. Canadians indicating that they are not impacted are making more modest decisions like cutting back on discretionary spending.

Ongoing concern about paying bills
Two-thirds (67%) of consumers impacted remain concerned about their ability to pay bills and loans, slightly down over the past two months from 70%. Though that number remains relatively steady, the length of time consumers feel they are able to maintain bill payments fell. While 43% of consumers impacted felt they could maintain payments for another 1-3 months (compared to 49% the week prior), those able to maintain bill payments for less than 2 weeks increased from 9% the week prior to 13%. While credit card payments remain the bill most consumers say they won’t be able to pay (46%), the overall proportion dropped from 48% the previous week. 

Gen Z feeling the brunt of the impact
Gen Z are now struggling the most as the proportion indicating they are negatively impacted grew to 69% - the only generational cohort to increase in the past month. In comparison, 64% of Millennials and 59% of Gen X report being negatively impacted. This may be due to a combination of newer entrants into the workforce and students with less savings and liquidity to fall back on.

Details about the research and additional resources for consumers can be found on TransUnion’s COVID-19 website.

About TransUnion

TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so 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 provides 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 comprise some of the nation’s largest banks and card issuers, and TransUnion is a major credit reporting, fraud, and analytics solutions provider across the finance, retail, telecommunications, utilities, and government and insurance sectors.

For more information visit: www.transunion.ca

Contact	Fiona Bang
E-mail	Fiona.Bang@ketchum.com
Telephone	647-680-2885

FAQ

What percentage of Canadian consumers reported being negatively affected by COVID-19 according to TransUnion's latest study?

According to TransUnion's study, 55.1% of Canadian consumers reported being negatively affected by COVID-19.

How have Canadian consumers' expectations about household income changed in recent weeks?

Expectations regarding household income have improved, with only 15% of Canadians expecting a negative impact, down from 24%.

What financial adjustments are Canadians making in response to COVID-19?

Canadians are using unemployment benefits, paying partial bills, and increasingly dipping into retirement funds to manage cash flow.

Which generation is experiencing the most financial difficulties according to the TransUnion survey?

Gen Z is experiencing the most financial difficulties, with 69% reporting negative impacts from COVID-19.

What is the current concern level among affected Canadian consumers regarding bill payments?

67% of consumers who are negatively impacted remain concerned about their ability to pay bills and loans.