The COVID-19 pandemic is creating major economic and financial distress for consumers across the globe. Millions of Canadian jobs 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 four.
Over 60% of impacted consumers indicated they’re spending less on entertainment and eating out, while 30% have cancelled subscriptions and memberships, and over 20% have cut back on retirement savings.
They’re also delaying purchases — particularly vacations and holidays (52%), home improvements (27%) and auto purchases (19%).
Data collected May 4–5 shows under three in five (59%) Canadian consumers say they’re currently financially affected by the COVID-19 health crisis, unchanged from week three. Millennials seem to be most vulnerable as 72% still claim they’re negatively affected.
Consumers seem to be more confident about the future and their survival plan through the crisis. This is likely due to a combination of policy support and bank forbearance programs, and consumers making the necessary adjustments as they get used to a new normal.
Of the 59% of Canadians financially affected by COVID-19 (unchanged from week three):
This number is up slightly from the previous week (66%), with reports showing:
Impacted Canadians said they will not be able to pay:
Subsidies, deferral programs and consumers’ ability to manage finances through the crisis are likely contributing to an overall improvement, albeit slight, in being able to pay essential bills.
On average, consumers who are affected expect they’ll be short by C$951.00 (down 8% from C$1,035.20 in week three) when paying bills or loans. With the exception of Gen Z, all generational cohorts indicated the amount they’d be short is now less than previous weeks. Gen Z increased by 7% to $916.70. Impacted consumers expect they’ll not be able to pay their bills or loans in 7.3 weeks (6.6 weeks in week three).
As a result, consumers are turning to withdrawals from savings and retirement accounts to offset shortfalls. This is a concern as it may affect retirement and overall net worth.
To date, just over two in five impacted consumers (43%) have reached out to the companies they have accounts with to discuss options.
While the overall proportion of responders targeted by fraud has dropped from 28% to 25%, there’s been an increase in those who acted and became a victim of a fraud scheme.
This is more prevalent among younger consumers: Gen Z responders who are victims nearly doubled from 8% to 14%, likely because they’re more comfortable transacting digitally than other generations.
The number of consumers checking their credit scores daily has risen slightly.
Younger generations are more likely to monitor their scores, with nearly half of Gen Z consumers checking at least monthly. Because these consumers are more digitally engaged, they’re likely using the free monitoring services provided by many lenders online and are getting monthly updates pushed to their devices.
Of those that do monitor their credit score, half are taking advantage of the free monitoring services provided by lenders.
We’ve developed several resources to assist 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.