Baby boomers still hold the most wealth in Canada, and generation X are the biggest consumers, according to a new report from Statistics Canada.
The report examines wealth distribution by demographic cohort — boomers (born 1946 to 1964), gen X (1965 to 1980) and millennials (after 1980) — finding that Boomers remain the wealthiest with an average net worth of $1.2 million, and accounting for about half of all household wealth.
The boomers’ share of wealth was essentially unchanged between 2010 and 2019, StatsCan reported.
The share for the pre-1946 crowd has diminished as they draw down assets in retirement, and sat at about 15% in 2019. The younger cohorts (gen X and millennials) are increasing their share of wealth as they accumulate assets.
StatsCan also reported that gen X has the highest debt-to-income ratio at 220%, although this is down by 18 percentage points since 2010.
And, gen X households are the biggest consumers, spending on average over $100,000 in 2019.
“While Generation X households spend more in most categories, boomers spend more on insurance and financial services, the pre-1946 generation spend more on health, and millennials spend more on education,” the report said.
Millennials also saw their debt-to-income ratio rise by 21 points between 2010 and 2019 to 199%. At the same time, their debt-to-asset ratio declined from 45.6% to 39.7%.
StatsCan noted that “growing real estate values for millennials have more than compensated for their increased debt holdings since 2010, [but that] disposable income has not kept pace, growing at an average rate of 5% per year compared with 6% for total debt.”
For gen X, the debt-to-asset ratio dropped from 38.3% in 2010 to 23.2% in 2019, “as the growth in real estate, pension plans and investment funds outpaced debt,” the report said.
Given that gen X and millennials both have high debt-to-income ratios, the report noted that they are also “more susceptible to reductions in disposable income in 2020, as the effects of the Covid-19 pandemic have negatively impacted employment.”