Many say they simply don't have the money, but may be missing opportunities to get advice about how to reduce their debt
TORONTO, June 5, 2013 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) Poll conducted by Harris/Decima reveals that half of Canadians with debt say their debt level is the same or higher than it was a year ago, despite prior CIBC polls showing debt repayment as the top priority for Canadians in 2013.
Highlights of the poll include:
- 71 per cent of Canadians said they currently carry some form of debt, in line with the national average in a similar poll conducted last year (72 per cent)
- Among Canadians with debt, 21 per cent say their level of debt has increased in the last 12 months, while another 28 per cent say their debt level has stayed the same - which indicates nearly half (49 per cent) of Canadians with debt did not make progress towards paying it down in the past year
- The top reason cited for not making progress on debt reduction was not having the money to do so
- 50 per cent said they have reduced their debt in the last year
"Though Canadians have identified paying down debt as their top financial priority for the past three years, our poll shows almost an even split between those who are making strides and those who aren't," said Christina Kramer, Executive Vice President, Retail Distribution and Channel Strategy, CIBC. "Today's historically low interest rates represent a real opportunity to reduce your total debt level, however to take advantage of these low rates it is critical that Canadians have a plan to make that happen."
CIBC's annual Financial Priorities Poll, released in January 2013, found that paying down debt was the top financial priority of Canadians for the third consecutive year.
"Not Having the Money" Cited as Top Reason for not Making Progress
Among those Canadians who said they aren't making progress on debt repayment, the top reason provided was they don't have the money to put against what they owe (29 per cent), followed by unplanned expenses which affected their ability to pay more towards their debt (12 per cent).
A CIBC study from earlier this year shows that despite being a financial priority, debt is not top of mind when it comes to getting advice. When Canadians were asked what topics come to mind about a conversation they may have with an advisor, only 6 per cent cited debt.
"It can be challenging to find the money each month to put towards reducing your debt, but our poll clearly shows that many Canadians are doing just that despite having the same everyday financial pressures of those who say they are not making progress," said Ms. Kramer.
She noted that with many Canadians avoiding conversations about debt management, they are missing an opportunity to get personalized advice and put a plan in place.
"You should talk with an advisor about your debt management goals the same way you would talk to them about your goals for retirement, because your finances are all connected," added Ms. Kramer. "A conversation with an advisor can lead to a plan that puts on you on track to achieve your broader financial goals."
Advice on Managing Debt:
CIBC offers these tips to help Canadians take charge of their finances and reduce debt as part of their long term financial plan.
- Make lump sum payments to higher interest debt first to reduce interest costs
- If you have debt, work with an advisor to structure it to minimize your overall interest costs by utilizing debt products that offer a lower interest rate and having a strategy to pay these balances down in a specific time frame
- While interest rates remain near historic lows, don't ignore the long term benefits of making small adjustments to your payment today. Setting your debt payment even slightly higher than your required payment can reduce your overall interest costs and help you become debt free faster
- Use free budgeting tools to help you stay on budget - CIBC CreditSmart, available to CIBC credit card holders, allows you to set customized budgets and receive spend alerts if you exceed your planned budget for the month, helping you stay on top of your everyday budgeting and saving
KEY POLL FINDINGS
Percentage of Canadians currently managing some form of debt, by region:
|Manitoba and Saskatchewan||73%||77%|
Percentage of Canadians currently managing some form of debt, by age:
|65 + over||56%||56%|
Among Canadians with debt, percentage of those that say they have increased their debt over the past 12 months, by region:
|Manitoba and Saskatchewan||24%|
Among Canadians with debt, percentage of those that say their level of debt has stayed the same over the past 12 months, by region:
|Manitoba and Saskatchewan||23%|
*Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in samples of 2002 Canadians between March 28 to April 7, 2013 and 1002 Canadians between April 25 - 28, 2013. Samples of this size have a margin of error of +/-2.2%, 19 times out of 20 and +/-3.1%, 19 times out of 20 respectively.
CIBC is a leading North American financial institution with over 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Media Centre on our corporate website at www.cibc.com.