Canadians age 65 and over who are in debt fear that they will never be able to pay it off—more so than other indebted age groups, according to a new survey.
A CIBC poll reveals that 14% of all Canadians in debt believe they will never be completely debt-free. Those who are 65 and over make up the biggest chunk within that 14% group—21% of them worry that they will never get a handle on their debt.
Overall, more than half of retired Canadians say they’re stuck in debt.
“Canadians 65 and over are more likely to be working with a fixed income, which can make debt repayment more challenging,” says Christina Kramer, executive vice-president for retail distribution and channel strategy with CIBC.
Individuals between the ages of 18 and 34 comprise a much smaller part (7%) of the 14% group.
The main reason why indebted Canadians feel they will have debt for life is that “they are already too far in debt to pay it off based on their current circumstances,” the poll says. The cost of living being “too high” is another major reason.
However, there is a small group of Canadians who think they will always carry debt simply because they’re comfortable with it and don’t intend to pay it off.
But losing control over debt, no matter what age you are, is not a good strategy, so getting back on track is crucial, according to CIBC.
The bank says paying off higher-interest debt first is a good way to start. Then, even small steps would work because they would bring down the interest that has to be paid each month.
At the same time, CIBC recommends increasing payments if possible—even though interest rates remain near historic lows. “Setting your debt payment even slightly higher than your required payment can reduce your overall interest costs and help you become debt-free faster,” according to the bank.
Using a financial advisor and free budgeting tools is yet another CIBC recommendation.
The CIBC poll surveyed more than 2,000 Canadians this spring.
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