The impact of COVID-19 on household income is decreasing and the generation
TORONTO, June 24, 2021 (GLOBE NEWSWIRE) – As pandemic restrictions loosen across the country, Canadians’ hopes for their financial situation have risen slightly since the previous survey period, 5 to March 10, 2021. Less than a third of Canadian consumers say they expect their household income to be negatively affected by COVID-19 in the future. Along with this optimism, Canadians are also prepared to increase their spending on activities such as online or in-store shopping, dining out, travel and entertainment.
However, COVID-19-related fraud attempts continue, with the number of respondents reporting being targeted twice since the previous period. While all generations have been targeted by several types of fraud, older generations have experienced the highest incidences of phishing attempts.
The most recent Consumer Pulse study includes a survey of 1,039 Canadian consumers conducted between June 2 and June 7, 2021.
“While the financial impact of the pandemic is not over, Canadians generally feel positive about their financial situation,” said Matt Fabian, director of financial services research and consulting at TransUnion. “The younger generations in particular have indicated that they are hopeful and ready to increase their discretionary spending.”
Consumers confident in their financial future continue to pay off their debts
Canadian consumers continue to be resilient as the financial impact of COVID-19 gradually diminishes. In the latest Consumer Pulse study, 35% of those polled said their income was negatively affected by the pandemic. In May of last year, that number was significantly higher, with 62% of respondents reporting a negative financial impact from the pandemic. The decrease in the negative financial impacts of the pandemic has been accompanied by a decrease in balances as Canadian consumers continue to repay their debts.
Additionally, more than two-thirds (70%) of those surveyed believe their income will not be affected by COVID-19 in the future. Likewise, 70% of respondents indicated positive feelings about their financial outlook, with 61% rating their financial situation as stable or optimistic. This confidence was relatively consistent across generations and suggests that consumers are optimistic about an economic recovery.
Households that could have been more affected by the economic shock of the pandemic have benefited from government subsidies and payment deferral programs from lenders to maintain a stable economic situation.
Although TransUnion observed growing confidence in the economic outlook of consumers, their confidence in paying bills did not change significantly, with 21% of respondents (+1%) not knowing how they would pay their bills. bills and 37% of respondents saying they would likely only pay partial payments on bills and loans. Additionally, 34% said they would borrow money from family or friends or withdraw savings and investments to cover unpaid bills. Only 17% said they intended to open additional lines of credit to generate cash, 7% said they would open a new credit card account, and 10% said they would take out a personal loan.
Almost half of all households (46%) continue to reduce their discretionary spending, although this percentage has fallen by 6% since the last survey. As lockdown restrictions ease and consumers return to their previous spending habits, consumers have said they will likely increase spending on shopping and dining out this summer.
Generations divided on the importance of and access to credit
In the first quarter of 2021, TransUnion’s Industry Insights Report found that 29.8 million Canadian consumers have access to credit.
Overall, 53% of consumers say they have sufficient access to credit, while 19% think they don’t. Younger generations are more likely to think they don’t have access to credit, with just 32% of Gen Z respondents saying they have enough access. In contrast, 70% of baby boomers reported having sufficient access to credit and loan programs.
However, the pandemic may have reduced respondents’ beliefs in the importance of credit. Less than half (48%) of those surveyed believe that access to credit is important to achieving their financial goals, compared to 52% of those surveyed since the same period last year. Once again, younger generations hold different views than older generations, with 62% of Gen Z respondents seeing credit as important to meeting their financial goals, compared to just 38% of baby boomers.
“Through many aspects of our financial data, we see a clear generational divide about what matters to a consumer’s economic outlook,” Fabian explained. “The youngest respondents recognize the importance of credit but do not think they have enough access to it. As the economy reopens, we expect younger generations to lead the way when it comes to spending in the Canadian market. “
Digital fraud activity has increased significantly
During the pandemic, there has been an increase in fraud activity, with digital fraud attempts from Canada increasing by 218%, as reported by TransUnion’s most recent global fraud study. The number of Canadian consumers who reported being targeted or victimized by a fraud scheme has doubled in the most recent period, from 3% to 6%, a significant increase.
Reflecting the general trend of fraud, maritime fraud cases have doubled to 15% from the previous period, while insurance fraud has more than doubled from 4% to 10%. These were the fastest growing scams among the reported fraud targets.
Younger generations tend to be more frequently targeted by maritime fraud, changing information through a call center, and bogus insurance scams than older generations, who are more likely to be targeted by scams. by third party sellers and phishing attempts.
TransUnion’s COVID-19 Support Center provides useful information to consumers who are concerned about their ability to pay their bills and loans. The full Consumer Pulse study can be viewed here.
About TransUnion (NYSE: TRU)
TransUnion is a global information and analysis company that makes trust in the modern economy possible. To do this, we provide a complete picture of each person so that they can be reliably and securely represented in the market. As a result, businesses and consumers can transact with confidence and achieve great things. We call it Information for Good.® TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people in more than 30 countries. Our customers in Canada include some of the country’s largest banks and card issuers, and TransUnion is a leading provider of credit, fraud and analytics solutions to the finance, retail, telecommunications, utilities, government and insurance.