The financial well-being of working Canadians has declined over the past year, with distress increasing for those experiencing the most financial hardship, according to a new study.
The number of working Canadians living paycheck to paycheck increased by 26% in 2022, compared to last year, according to the findings of the study, which combines the Institute’s annual survey. National Payroll and analysis from the Canadian Financial Well-Being Lab.
Part of the analysis released on Tuesday included an examination of the three financial “clusters” into which Canadians fit – those who are financially comfortable, those who are struggling and those who are financially stressed – and showed that the gap had widened between those who adapt and those who are stressed.
Although the analysis found that people with lower household incomes were more likely to fall into the stressed category, 41% of people in this cluster reported an annual household income above $100,000. , people in the stressed group were living closer to their limits, with 91% spending all or more than their take home pay, up from 82% last year.
The study also found that the number of employed Canadians spending more than their take-home pay was at the highest level ever reported in the survey, at 11%.
Meanwhile, debt levels rose across all groups, with 27% reporting an increase from 17% last year. The number of working Canadians with credit card debt has skyrocketed to 42% from 29% in 2021.
In the eyes of National Payroll Institute President Peter Tzanetakis, the data signals that things are likely to get even tougher for more people in the near future.