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IG Wealth Management: Canadians’ Financial Confidence Continues to Fall Post-Pandemic

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This article was published 08/12/2023 (1009 days ago), so information in it may no longer be current.

As 2023 comes to a close, Canadians once again find themselves caught in a perfect storm of financial challenges.

Concerned by rampant inflation and high interest rates, people are struggling to make ends meet due to an increasingly high cost of living, according to IG Wealth Management’s annual Financial Confidence Index.

The Index tracks and reports on Canadians’ overall financial confidence based on 10 survey questions relating to IG’s Four Pillars of Financial Confidence: Personal Financial Outlook, Planning and Literacy, Trust in the Economy and Current Financial Situation.

In its sixth year, the study found that Canadians’ trust in the economy was down three points to 40 from 43 in 2022, while optimism in the economy dropped from 56 points last year to 51 points in 2023. Canadians’ overall financial confidence fell to 50, down seven points from 2021 and one point from 2022.

Additionally, approximately 60 per cent of Canadians believe the country is already in a recession, with 68 per cent believing Canada will be heading into a recession in 2024. There’s little confidence among consumers that economic conditions will improve due to the perception of chronic mismanagement by the government and financial authorities.

“While Canadians are feeling relatively stable with their current financial situation, there are concerns about where things could be headed in the year ahead and in our ability to navigate this uncertainty,” said Damon Murchison, President & CEO, IG Wealth Management. “This can, in part, be attributed to the apprehension felt over the last year about the cost of living, rising interest rates and intensifying global tensions.”

On a positive note, the survey found that confidence levels among Canadians who work with a financial advisor are 29 per cent higher than those who do not, supporting the idea that the value of advice is critical during times of economic uncertainty.

“Given Canadians’ apprehension about the future and the rising cost of living, the value of advice has never been more important,” said Mr. Murchison. “Working with a financial professional who can create or revisit a holistic financial plan can help to ensure your financial well-being is protected today and into the future.”

Speak with an IG advisor today to discover how you can improve your financial confidence.