Millennials and younger members of Generation X have seen their debts swell to record levels in recent years. Read more
Almost 60 per cent expected the rate increase to have a negative impact on their finances and a third were bracing for “significant” challenges.
A big problem, Freestone says, is that though earnings have grown rapidly, they have not grown enough to absorb the higher debt payments. “Since the beginning of the pandemic, average hourly earnings have risen 12 per cent, less than half the increase of the average five-year fixed mortgage payment,” she said.Only 14 per cent of Canadians aged 65 and older still hold a mortgage and if they do it’s half the size of a millennial mortgage, she said., people 55 and older, have also built up a larger share of assets that benefit from higher interest rates.
Older Canadians too are less dependent on income. For Canadians aged 65 and older two thirds of income comes from private pensions and government benefits, while younger age groups get 85 per cent of their income from their jobs.Article content And boomers on average spend less than younger generations. Freestone says the older age group spends a third less on discretionary goods and services than Canadians in their thirties.high inflation“While growth is still holding up even after record rate hikes, higher unemployment rates may trigger an entirely different outcome for demand in the year ahead,” she said.
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