In its study “The Home Stretch: A Review of Debt and Home Ownership Among Canadian Seniors”, HomEquity Bank found that old Canadians’ “ability to retain and maintain a home is progressively compromised by record household debt levels, modest long-term savings, the decline of defined-benefit pensions and extended life expectancies.”
The study results also indicated that while fully 91 per cent of Canadians aged over 65 said that retaining their residences is important, only 78 per cent have access to “savings and investments with 40 per cent of those having less than $100,000 set aside.”
“The data also shows that 15 per cent of Canadian seniors have a mortgage (compared with 34 per cent of non-seniors) and 17 per cent have car loans (compared with 34 per cent of non-seniors). But when it comes to unsecured lines of credit (LOC) that gap narrows: 30 per cent of seniors carry this form of debt compared with 33 per cent of non-seniors, and 10 per cent of Canadian seniors have a home equity line of credit (HELOC) compared with 9 per cent of non-seniors,” the report added.
On the income side, 77 per cent of the respondents said that the Canada Pension Plan is their primary expected source of funds. 73 per cent will rely on Old Age Security, and 57 per cent will utilize RRSPs. Meanwhile, 48 per cent will be leaning upon work pensions, with the same proportion having access to savings.
“HomEquity Bank has long called for an honest, national conversation regarding the financial health of Canadian seniors. This study further solidifies that need,” president and CEO Steven Ranson said.
Ranson emphasized the crucial role that this data would play in ensuring a better policy regime for Canadian seniors, and for the populace as a whole.
“We can’t rely on a status quo approach. Collectively, we will have to think about finances, home ownership and debt in new, strategic ways to ensure seniors can plan for a stable, worry-free retirement,” Ranson stated.
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According to a recent report from a major lender catering to seniors, the aging segment of Canadian population is now contending with multiple barriers to maintaining ownership of their homes, most notably the record-breaking levels of household debt in the current market.