TORONTO, July 17, 2012 /CNW/ - A national survey commissioned by the
Canadian Institute of Chartered Accountants (CICA) finds that almost
half of the respondents (48 per cent) would be challenged to keep up
with mortgage or debt payments following a significant rise in interest
Among that group of respondents, 29 per cent would encounter serious
problems making payments if rates were to rise two per cent or less.
Another 29 per cent believe a rate increase of three to four per cent
would be challenging.
The CICA survey, conducted by Harris/Decima Inc., also found that nearly
four in 10 of all respondents believe they will still be paying off
debt after they turn 65.
"Many Canadians have little room for error when it comes to their
finances and that scenario won't be changing overnight," said Kevin
Dancey, FCA, president and CEO, CICA. "This is why the CICA firmly
believes that helping Canadians develop financial knowledge is critical
to Canada's ongoing economic strength and prosperity."
That thought is echoed by James Rajotte, Member of Parliament for
Edmonton-Leduc. His Private Member's Motion to help improve financial
literacy in Canada was recently adopted by the House of Commons. "With
many Canadians vulnerable to rate hikes or facing long-term debt, it is
important that they acquire the knowledge required to make the best
financial choices for their circumstances," stressed Rajotte.
The survey found that groups most worried about rate hikes are women,
younger adults and those who lack confidence in their financial skills.
Almost six in 10 surveyed (59 per cent) save less than 10 per cent of
their monthly income and, of these, 33 per cent save less than five per
cent or nothing at all.
In addition, the research also focused on credit card financing. Forty
three per cent of those surveyed reported carrying over a balance on
their credit cards, up nine percentage points from a similar study
conducted for the CICA in 2010.
Sixty per cent of Canadians have borrowed for the purchase of a big
ticket item such as a car or vacation, and 44 per cent still owe
against these loans.
Almost two in 10 Canadians (17 per cent) have borrowed to cover
day-to-day living expenses, and nearly half (42 per cent) still owe
against these loans.
Insufficient retirement savings
Of those 55 or older, 43 per cent reported they have not saved enough
for their retirement.
Nearly four in 10 think they will have to work past age 65 to make ends
Almost half of the survey respondents (46 per cent) indicated that their
financial situation had not changed year over year. However, roughly
two in five reported improvement and the reasons cited among this group
included: payment of some or all of existing debt (59 per cent); an
increase in overall household earnings (58 per cent) and general
improvement in money management skills (49 per cent).
"It is encouraging to see debt management and improved financial skills
being referenced by individuals feeling better about their own
situation," stressed Dancey.
The survey findings assist the CICA in determining ways it can continue
to play an active role in helping Canadians learn more about personal
finances. The Institute recently published A Parent's Guide to Raising Money-Smart Kids, a book designed to put parents at ease when preparing their children for
life's important financial decisions. Additional resources are
available through a CICA website dedicated to financial literacy (www.financialdecisionsmatter.com).
The CICA's Canadian Finance Study 2012 was conducted by Harris/Decima
Inc. via telephone between March 29 and April 16 with a national random
sample of 1,000 adult Canadians aged 18 years and over and is
considered accurate to within ± 3.1 per cent, 19 times out of 20. A
survey summary report is available online (www.cica.ca/flsurvey2012).
Chartered Accountants (CAs) are Canada's most valued, internationally recognized profession of
leaders in senior management, advisory, financial, tax and assurance
roles. Through their integrity, expertise, and internationally
recognized qualification standards, Canada's 82,000 CAs sustain their
influence and leadership position both in Canada and globally. As
trusted business advisors to Canadian organizations of all sizes,
Canada's CAs foster confidence in Canadian business and contribute to
the health and sustainability of Canada's capital markets and economy.
The Canadian Institute of Chartered Accountants (CICA) represents
Canada's CA profession both nationally and internationally. The CICA is
a founding member of the International Federation of Accountants (IFAC)
and the Global Accounting Alliance (GAA).
SOURCE Canadian Institute of Chartered Accountants
For further information:
or to arrange an interview, contact:
Tobin Lambie, Manager, Media, CICA