Financial pressure mounting for Canadians, study shows

A study by the National Payroll Institute and the Financial Wellness Lab of Canada found that the number of workers living paycheck to paycheck increased by 26% in 2022 compared to last year.

Part of the analysis included an examination of the three financial “clusters” in which Canadians find themselves: comfortable, comfortable or stressed. He found that the gap has widened between those who are coping and those who are stressed.

Although the analysis found that people with lower household incomes were more likely to fall into the stressed category, 41% of those in the stressed group reported an annual household income above $100,000.

Additionally, those in the stressed group were living closest to their limits with 91% spending all or more of their take home pay, up from 82% last year.

The study also found that the number of employed Canadians spending more than their take home pay was at the highest level ever reported in the survey at 11%.

Meanwhile, debt levels rose across all groups, with 27% reporting an increase from 17% last year. The number of working Canadians with credit card debt has skyrocketed to 42% from 29% in 2021.

Peter Tzanetakis, president of the National Payroll Institute, said the data indicates things are likely to get even tougher for more people in the near future as interest rates rise and inflation persists.

A separate report by BMO Financial Group found that rising costs led more than a third of Canadians (36%) to cut their savings contributions and almost a quarter (22%) to cut their pension contributions.

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