The Index reports the overall financial confidence of Canadians based on 10 survey questions related to IG’s four pillars of financial confidence which consist of: Current Personal Financial Situation, Personal Financial Outlook, Planning and Literacy and Trust in the Economy.
It finds that the country’s level of financial confidence stands at 50, matching 2023 and just one point down from 2022. However, what stands out this year are concerns about the future- many are worried about what could happen in 2025 and how this might impact them with Trust in the Economy trailing the other three pillars by at least 10 points. So why are Canadians so worried about the future? It’s largely being fueled by:
- Concerns about a recession: The majority (54 per cent) fear a recession can be on the horizon.
- Job insecurity: Canadians are concerned about their jobs, with more than one-third believing the job market will worsen in 2025.
- Anxiety about political climate and global issues: Half expect the political situation and economy of Canada and the U.S. to deteriorate in 2025.
Interestingly, despite the anxiety that still lingers for the economy, the study shows that Canadians benefit from the value of advice, with those who currently work with a financial advisor having a significantly higher level of financial confidence (59) than those who do not (44).
“Given the growing complexity of the world around us, the speed at which things are changing and the volatility of the last few years, it’s not a surprise that people who work with an advisor feel better about their financial situation,” observed Mr. Murchison.
While many Canadians are still anxious heading into the new year, it’s important to note that some regions in the country are more financially confident than others. The Index revealed that the Western provinces are, on average, more optimistic about their finances. B.C. leads the way with a high score of 55, compared to Quebec (49) which dropped four points compared to last year.
These results may, in part, be attributed to the proactive approach of British Columbians, as more than half report using financial advice – significantly higher than the national average. Political and economic factors, including a disproportionate reaction to recent interest rate reductions and wage increases, may also explain this recent surge in optimism. On the other hand, Quebec’s declining confidence calls for greater financial education and guidance with just 49 per cent of Quebecers feeling prepared and on track to meet their financial goals, a steep decline from 62 per cent last year.
“Working with a qualified advisor can put things in perspective, help you see the forest from the trees and create an integrated financial plan that takes all dimensions of your financial world into consideration.” said Mr. Murchison.
The IG Financial Confidence Index is part of IG’s community program, IG Empower Your Tomorrow, which is dedicated to building financial confidence among Canadians, especially those most at risk. Visit IG Empower Your Tomorrow to learn about the various initiatives supported by IG and speak to a local IG Wealth Management Advisor today to increase your financial confidence: Find an Advisor | IG Wealth Management.
Written and published by IG Wealth Management as a general source of information only. Not intended as a solicitation to buy or sell specific investments, or to provide tax, legal or investment advice. Seek advice on your specific circumstances from an IG Wealth Management Advisor.
