Debt, housing, and mental health top COVID-19 concerns

Record high stock prices and red hot real estate markets tell only one side of the story when it comes to Canadian resilience during COVID-19.

Rising asset prices mean the wealthy are doing just fine, for the most part. For everyone else — like the approximately one million still out of work and business owners facing collapse due to more lockdowns — there’s a lot of worry about the pandemic’s effects.

A new survey by Manulife Bank found a third (35 percent) of Canadian respondents said they were financially unprepared for COVID-19. Nearly three-quarters said they were financially affected by the pandemic, two-thirds (69 per cent) of which said they were negatively affected. Of that group of respondents, 42 per cent said it will take more than a year to get their finances back to pre-COVID levels.

A quarter said they were struggling to keep up with bills and even though a number of reports show savings rates are up, 24 per cent said they are saving none of their after-tax income. That’s a 5 point increase from the same period last year.

Young Canadians have been the hardest hit in terms of the job market, and it shows in the survey’s results too. People under 40, especially those that carry high debt loads, were most likely to face financial hardship.

Almost half (46 per cent) of respondents who are carrying debt said the pandemic was taking a toll on their mental health, which is a 5 point increase from last year. Top of mind worries include 28 per cent being concerned about supporting their children through post-secondary education or saving for retirement. Those rapidly rising house prices mean 36 per cent worry they won’t be able to save for a home because they’ll be priced out of the market.

"Debt can negatively impact mental health and leave Canadians feeling like their financial goals are unachievable. The pandemic has made that even more pronounced," said Rick Lunny, president and CEO, Manulife Bank, in a release.

“It’s so important to have financial flexibility, especially when one looks at purchasing a home – it’s easy to feel stressed. Financial conversations are essential to identify opportunities, what matters most and help you stay on track, no matter the financial environment.”

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains

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