- More than half of homeowners report having less debt than they did 12 months ago.
- Most want to be debt-free by retirement, but many aren't confident they'll succeed
- Those who get debt management advice from their financial advisor are more confident they'll be debt-free in retirement
- Few homeowners plan to tap into home equity for retirement income
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WATERLOO, ON, May 22, 2013 /CNW/ - In a sign that Canadians are becoming more focused on reducing their debt, a Manulife Bank of Canada Survey found that 55% of homeowners report having less debt than they did 12 months ago. This is an improvement from August 2012, when 50% reported year-over-year debt reduction. Just one in five (20%) homeowners report having more debt than they did a year ago, with the balance reporting no change in their debt level (16%) or being debt-free over the past 12 months (9%).
"This is an encouraging result," says Doug Conick, President and CEO of Manulife Bank of Canada. "Effective debt management should be a core component of every financial plan. This is true whether you're just starting out in life and trying to manage the amount of interest you're paying or approaching retirement and trying to ensure you're debt-free before you get there."Alberta homeowners report the most success, with six in 10 (60%) reporting year-over-year debt reduction, while just under half (49%) of those in Quebec report the same result. Many Canadians are not confident they'll be debt-free at retirement While eight in 10 (80%) Canadian homeowners who have debt indicate it's very important to be debt-free by the time they reach their planned retirement age, fewer than six in 10 (56%) are confident they'll achieve that goal. Notably, the percentage of those expressing confidence increases to two-thirds (66%) among those who get debt-management advice from a financial advisor. "Becoming debt-free may appear, on the surface, to be easier than saving and investing," says Mr. Conick. "However, if you're serious about getting out of debt, want to minimize the interest you pay and still have flexibility in your budget - you need a plan. A financial advisor can show you how your debt fits into your broader financial goals and develop a customized plan to help you become debt-free sooner. Just as importantly, an advisor can keep you focused on your debt freedom goal - and this can be a big advantage in your journey toward a debt-free retirement."