A new report finds slight improvements in the debt worries of Albertans. (Photo: Skawee | Dreamstime.com)

By David Opinko

Debt anxiety improving in Alberta, but majority still concerned

Apr 8, 2024 | 9:13 AM

While the majority of Albertans remain anxious about being able to pay off their debts, there have been some recent improvements.

That is according to the latest MNP Consumer Debt Index.

On the positive side of things, more Albertans perceive their current debt situation to be better now than it was one year ago (27 per cent, up three points) and fewer rated it as much worse than before (17 per cent, down four points).

One quarter of survey respondents believe they are better equipped to absorb an interest rate increase of one percent (up six points) or an additional $130 in interest payments (up seven points).

MNP Licensed Insolvency Trustee Donna Carson says much of the positive changes have to do with the possibility that the Bank of Canada may start to cut interest rates in the near future.

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“They are exhibiting more confidence in their debt situation and ability to manage interest rate hikes. However, households in the province are continuing to feel the squeeze from looming mortgage renewals, enduring financial impacts from the COVID-19 pandemic, and cost-of-living pressures,” says Carson.

Conversely, the study found that 62 per cent of Albertans are concerned about their ability to repay their debts (down nine points).

Approximately 47 per cent regret taking on the amount of debt they have (down three points) and 22 per cent reported being $200 or less away from being unable to meet all of their financial obligations (unchanged).

Even though 30 per cent said they have recovered financially since the start of the COVID-19 pandemic, an equal percentage have found themselves in a worse state than they were in pre-pandemic.

Just over half of Albertans reported feeling a “social squeeze” where they are having to miss out on lifestyle spending and social obligations.

“Albertans currently have the highest level of consumer debt in the country. The data shows many have regrets about their amount of debt and concerns about debt repayment,” says Carson.

Carson urges anyone who is concerned about their level of debt or their ability to repay their debt to speak to a financial advisor or licensed insolvency trustee.

The full report on the Consumer Debt Index can be found on the MNP website.