Increasing amount of Sask. residents say basic needs becoming less affordable: report
A rising amount of residents in Saskatchewan say affording basic necessities is becoming more difficult over time.
According to a recent Consumer Debt Index report released by MNP, 52 per cent of people in Saskatchewan and Manitoba said it is becoming less affordable to feed themselves and their family, compared to 50 per cent in December 2021.
Over the same timeframe, 47 per cent said it is more difficult to put money aside for savings – up eight percent. Forty per cent said it is more difficult to pay for transportation, up five per cent, while 39 per cent of people feel clothing is also more difficult to afford – a three percent increase from December of 2021.
“Households are having to put more money towards paying for basic living expenses as the cost of living rises and that is leaving less of a financial buffer which is critical to managing the impacts of interest rate hikes,” Pamela Meger, a licensed insolvency trustee with MNP LTD in Regina, said in a release.
However, the report revealed that fewer residents in the two provinces are finding themselves closer to insolvency, currently at 48 per cent compared to 53 percent last quarter.
Insolvency means a person is $200 or less away from not being able to meet all of their financial obligations.
“There has been a slight improvement in the number of individuals who are at risk of insolvency since last quarter, however, we do need to acknowledge that nearly half of Saskatchewan and Manitoba residents are still just $200 away from not being able to cover their bills and debt obligations,” Meger said. “Any future hikes to interest rates or the prices of basic necessities could chip away at the amount they have left over at month-end and push some individuals closer to insolvency.”
According to the report, one in three Saskatchewan or Manitoba residents expect their current debt situations to improve over the next year and far more people are now rating their personal debt situation as excellent. Fewer people are rating their credit situation as terrible, when compared to December of 2021.
“The economic situation here is still unfolding and it’s possible the optimism we are seeing here could be only temporary. We tend to notice the effects of interest rate hikes over time, so we may currently be seeing a false sense of optimism,” Meger said.
Data for the report was collected by Ipsos, a marketing research company, between Sept. 6-13, 2022. A sample of 2,000 Canadians 18 years and older were interviewed.
The report is accurate within +2.5 percentage points, or 19 out of 20 times, according to MNP.
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