CIBC Poll: Debt free by 55? Canadians expect to be debt-free by their mid-fifties, but most don't reach their goal
TORONTO, Aug. 29, 2011 /CNW/ - A CIBC (TSX: CM) (NYSE: CM) Poll conducted by Harris-Decima reveals that, on average, Canadians holding some form of debt today feel they will be debt-free by age 55. However, the poll also found that only one-third (35 per cent) of Canadians in the 55-64 age group today are actually debt-free.
"Being debt-free is a long term financial goal for many Canadians, and this poll suggests Canadians are actively looking ahead to the stage of life they will be in when they successfully pay off all of their debt," said Christina Kramer, Executive Vice President, Retail Distribution and Channel Strategy, CIBC.
She notes, however, that this disparity suggests that Canadians need to remain focused on a debt repayment strategy to ensure they are able to meet their target age for being debt-free.
A key finding of the poll shows that across all age groups, Canadians tend to believe they will be debt-free within approximately 10 to 15 years of their current age. The poll found:
- Canadians aged 18-24 believe they will be debt-free by age 32, on average
- Canadians aged 25-34 believe they will be debt-free by age 44, on average
- Canadians aged 35-44 believe they will be debt-free by age 54, on average
- Canadians aged 45-54 believe they will be debt-free by age 60, on average
- Canadians aged 55-64 believe they will be debt-free by age 65, on average
However, in every age bracket, many Canadians still hold debt beyond the average age identified within their age group. For example, Canadians 25-34 believe they will be debt-free, on average, by age 44. However, the poll shows that among today's 45-54 years old, only 18 per cent report being debt free, suggesting many Canadians aged 25-34 may not be debt-free as soon as they hope.
"A key finding in this poll is that the passage of time alone is not enough to achieve the goal of paying down your debt," added Ms. Kramer. "Canadians with a goal of being debt free would benefit from having a realistic plan in place that includes extra payments towards their debt and a strategy to minimize their interest costs."
The poll also revealed that a small percentage of Canadians see themselves as having debt long-term, with 8 per cent of poll respondents believing they will be into their 70s before their debt is paid off, and 10 per cent of respondents saying they will never be debt-free.
Albertans saw themselves as being debt-free at age 52 on average, the youngest age in the poll. Atlantic Canadians and residents of British Columbia were less optimistic, targeting age 58 to be debt-free, on average.
"It can be tempting to believe that ten years from now you will be better off financially and will have paid down your debt considerably, but the reality is that it takes a slow and steady approach to both debt management and savings to make progress towards your financial goals," said Ms. Kramer. "Paying down your debt is no different from having a plan to put money away for retirement - you need a goal and a plan to get you there, and a conversation with an advisor can help you build a strategy and start making progress towards being debt-free."
Canadians do see themselves as making progress towards debt repayment, with 61 per cent saying they have made progress in this area so far in 2011.
Past CIBC consumer poll data released earlier this month showed that Canadians are taking extra steps to pay down their debt faster, including making lump sum payments (46 per cent), and making sacrifices in order to make progress on debt management (46 per cent). "Seeing Canadians take these steps is encouraging and suggests that some Canadians do have a plan in place to achieve their goal of being debt-free and are working towards it," added Ms. Kramer.
Among Canadians with debt, the average age at which Canadians expect to be debt-free (rounded to the nearest year) by region:
National Average - Age 55
BC - Age 58
Alberta - Age 52
Man/Sask - Age 56
Ontario - Age 54
Quebec - Age 54
Atlantic Canada - Age 58
Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 2,008 Canadians between June 30, 2011 and July 10, 2011. A sample of this size has a margin of error of +/-2.2%, 19 times out of 20.
CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.For further information:
Kevin Dove, Senior Director, External Communications and Media Relations: (416) 980-8835 or Kevin.firstname.lastname@example.org