Pattie Lovett-Reid: Older Canadians slammed financially by the pandemic
HUNTSVILLE, ONT. -- The COVID-19 pandemic has been devastating for older Canadians in two ways affecting first and foremost their health, and also their wealth.
According to a new report from insolvency trustee Hoyes and Michalos, a generational shift has happened as the share of insolvencies among debtors 50 and older has increased for the first time in four years, now sitting at 29.8 per cent, while the share among younger Canadians has declined.
It was bound to happen.
Canadians have been living well beyond their means. The combination of loss of income, higher debt levels, and relatively low CERB payments is now forcing Canadians who have been carrying higher levels of debt to face a brutal financial fact: they are in trouble.
In an environment where interest rates were low and income was steady, maybe even increasing, it all seemed so affordable. Comfortable, in fact.
That was then, and this is now.
The pandemic has introduced a harsh new financial reality. Job security is a thing of the past . Sadly, a day of financial reckoning is coming for those on the cusp of retirement, and many are running out of options and time to pay off their debt.
The pandemic has shone a light on the number of Canadians living paycheque to paycheque, and as the debt levels mounted, vulnerable households knew it wasn't sustainable. High debt at any level can lead to financial ruin, but a sudden job loss can put a family teetering on brink of financial ruin over the edge.
According to the report by Hoyes and Michalos, debtors aged 50 and older owed an average of $65,929 in consumer credit, 12.6 per cent higher than the average insolvent debtor. And the debt of choice is interest credit cards, representing 41% of their overall debt load.
Call to action: If you are financially sinking, reach out and ask for help today. A licensed insolvency professional can help to develop a plan of action. You don't have the luxury of time, income or expertise to try and solve this alone.