The COVID-19 pandemic has created major economic and financial distress for consumers across the globe. Many jobs in the Canadian economy are already affected or at risk. To help organizations understand consumer impact and make informed decisions as the situation evolves, TransUnion is conducting research on consumers’ perceptions, expectations and ability to pay their bills. Here’s an overview of the main findings from the Wave 7 Report — based on data collected the week of July 27.
Wave 7 data indicates consumers are the most confident they’ve been since the pandemic began. Fifty-three percent reported their household is negatively impacted by COVID-19, while 6% indicated they may be negatively impacted in the future — both figures the lowest they’ve been since the survey started in March.
The proportion of consumers negatively impacted by COVID-19 decreased to 53%, well below the April high of 63%.
Regionally, the percentage of Western Canadians negatively impacted fell eight points to 49%; Central Canada remained flat at 56%; and 47% of consumers in Atlantic Canada indicated a negative impact (up five points from last month’s survey).
Gen X is the only generational cohort where the negative impact has increased — up three points to 58% since the previous survey.
Of the consumers who are financially affected by COVID-19:
Mortgage payments ranked lower, but the 26% of impacted respondents saying they’ll not be able to pay is the highest number since the survey started. This may be linked to the imminent expiry of deferrals.
On average, consumers who are affected expect they’ll be short by C$877.20 when paying bills or loans. This amount is down from C$922.20 in the last survey.
Consumers are paying down balances, with 31% indicating they intend to pay at least a partial amount of their bills — up three percentage points from the previous survey. Just under 30% say they’re using investments and savings to help pay bills (down four points).
Other mechanisms for making payments include:
Thirteen percent said they don’t know how they’re going to pay (up from 12%).
The proportion of consumers surveyed who are receiving some form of financial accommodation dropped two points to 16%.
Business loans are the most common product for financial accommodation (22%; down significantly from 59% in the previous survey), followed by private student loans (22%; down from 26%) and auto leases (15%; replacing personal loans).
Of consumers with financial accommodations:
The most common changes made by households during lockdowns include cutting back on discretionary spending (59%), and cancelling subscriptions and memberships (30%). Respondents are also looking to deleverage and save, with 11% indicating they’re paying down debt faster, and 16% saying they’ve created an emergency savings fund.
We’ve developed several resources to assist businesses and consumers in navigating this difficult time. To learn more about our weekly consumer research and download the latest reports and infographics, visit transunion.ca/financial-hardship-study