The current global COVID-19 pandemic is creating major economic and financial distress for consumers across the globe. Millions of jobs in the Canadian economy are either affected or at risk. To help organizations make decisions at a time when information on consumer impact is still emerging, TransUnion is conducting weekly surveys to better understand consumers’ perceptions and expectations in this rapidly evolving situation. Here are the main findings from the survey conducted in Week 1.
COVID-19 has brought about a new reality and has impacted consumers of all generations and income levels. Data collected in the week ending March 30th, 2020 shows:
Canadians financially affected by COVID-19 indicated this was a result of a reduction in working hours (33%) or losing their job (23%). In addition, many small business owners reported closures and/or reduced orders (9%).
Of those not currently impacted financially, 10% are expecting to be impacted at some point, while 16% are still not sure if their household income will be affected.
Of those who say they’ve been affected financially, 70% are concerned about their ability to pay bills and loans. Impacted Canadians said they will not be able to pay:
On average, consumers who are affected expect they’ll be short by $933.40 when paying bills or loans. They also anticipate not being able to pay their bills or loans in 5.8 weeks due to financial hardship.
One out of three (33%) Canadians impacted say they plan to pay only a portion of bills or debt, which means Canada’s already high debt balance per consumer will increase. To bridge the payment gap:
There is variance for payback plans across regions: In Western Canada, 29% of consumers don’t know how they’re going to pay their bills and loans, compared to 19% of Central Canadian consumers.
Almost half (48%) of the consumers impacted indicated the companies they have accounts with have not provided guidance on payment options. This indicates an opportunity for lenders to analyze their portfolios, identify and monitor customers most at risk, and develop strategies that offer relief to personal and small business customers.
We’ve developed several resources to help businesses and consumers navigate this difficult time. To learn more about our weekly consumer research, and download the latest reports and infographics, visit https://www.transunion.ca/financial-hardship-study.