A new study has found that the financial well-being of working Canadians has declined in the past year, with distress growing for those who are financially struggling the most.
A separate report also found that inflation is hitting Canadians’ savings.
A study from the National Payroll Institute and the Financial Wellness Lab of Canada found the number of workers living paycheque to paycheque increased by 26% in 2022 compared with last year.
Part of the analysis included a look at what three financial “clusters” Canadians fall into — comfortable, coping or stressed. It found that the gap has widened between those coping and those who are stressed.
While the analysis found those with lower household incomes were more likely to be in the stressed category, 41% of those in the stressed group reported an annual household income of more than $100,000.
Additionally, those in the stressed cluster were living closest to their limits with 91% spending all or more than their net pay, up from 82% last year.
The study also found that the number of employed Canadians spending more than their net pay was at the highest level ever reported in the survey at 11%.
Meanwhile, debt levels increased among all groups, with 27% reporting an increase compared with 17% last year. The number of working Canadians with credit card debt skyrocketed to 42%, up from 29% in 2021.
Peter Tzanetakis, president of the National Payroll Institute, said the data indicates that things are likely to become even more difficult for more people in the near future as interest rates rise and inflation persists.
A separate report from BMO Financial Group found that rising costs have led more than one-third of Canadians (36%) to reduce their savings contributions, and almost one-quarter (22%) to cut their retirement contributions.