2 out of 3 Canadians Stressed About Inflation in 2021 [New Study]

Subject matter expert reviewed

TORONTO, November 2, 2021 — PolicyMe, a digital life insurance innovator, surveyed Canadians to understand their biggest financial stressors and found that inflation is weighing heavily on their minds. As Canada’s inflation rate soared to an 18-year high of 4.4 per cent in September, increased cost of living is a source of financial stress for two out of three (67%) Canadians — more than double that of any other financial stressor. 

Following inflation, the top financial stressors include saving for retirement (30%), inability to absorb unforeseen expenses (25%), unpredictability of investments (25%), inability to save as much as pre-pandemic (22%), and high-interest consumer debt (17%). 

Parents of children under 18 report being more stressed on five of the six top personal finance stressors, compared to Canadians without dependent children. 

Top Personal Finance Stressors Parents With Children Under 18 Non-Parents
Increased cost of living / inflation 68% 67%
Not able to save enough for my retirement 37% 27%
Inability to absorb unforeseen expenses 28% 24%
Unpredictability of investments 19% 28%
Inability to save as much money as pre-pandemic 25% 21%
High-interest consumer debt (i.e., credit cards, car loans, etc.) 19% 16%

Financial preparedness can combat stress 

For many Canadians, concerns around high costs don’t stop at the grocery store or the gas pump, they extend to important financial protections, such as life insurance. Since the pandemic began, there has been a 50% uptick in the number of Canadians purchasing or considering life insurance — with 67 per cent of those citing COVID-related concerns as motivating factors. 

However, of those who did not purchase life insurance, 35 per cent cited a perceived lack of affordability as the reason. This figure remained consistent from early in the pandemic (May 2020) to now, suggesting that financial concerns have not eased despite the reopening of the economy. Notably, half of parents (49%) —  the demographic with the greatest need for coverage — who don’t have life insurance say they haven’t bought it because it is too expensive.

“Rising prices are a real concern, but there’s a misconception about the affordability of life insurance,” continues Ostro. “Getting covered is actually a very affordable way to ease financial stress. For roughly the cost of one takeout lunch per month, most people can afford a term policy, protecting their family financially if anything happens to them. It’s a stressful time for Canadians, but the good news is that a little planning can go a long way.” 

As a new kind of life insurance company, PolicyMe puts families first, equipping them with honest and uncomplicated life insurance solutions so they can feel secure about their financial future. For tips and tools to make confident life insurance decisions, visit our Life Insurance 101 resource hub.

About PolicyMe

PolicyMe is a Canadian digital life insurance solution built to make financial protection for families honest, uncomplicated and affordable. PolicyMe makes it easy to get a quote and apply for term life insurance online in 20 minutes or less. Using technology, they've streamlined the traditional insurance process resulting in a fully-underwritten life insurance policy that delivers the same quality protection you deserve but with fewer steps and lower costs. Based in Toronto, Canada, PolicyMe is currently licensed in Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island, Nova Scotia, Yukon Territories, Northwest Territories & Nunavut. 

About the survey

These are the findings of a study/survey conducted by PolicyMe from October 7-8, 2021 with a representative sample of 1,510 Canadians who are members of the online Angus Reid Forum, balanced and weighted on age, gender, region and education. The survey was conducted in English and French. For comparison purposes only, a sample of this size would yield a margin of error of +/- 2.5 percentage points, 19 times out of 20.

About the Angus Reid Forum:

The Angus Reid Forum is Canada's most well-known and trusted online public opinion community consisting of engaged residents across the country who answer surveys on topical issues that matter to all Canadians.

FAQ: Inflation in Canada in 2021

What is the CPI in Canada for 2021?

The CPI in Canada was 142.90 points in September 2021, and was previously 142.60 points in August 2021.

Will there be a CPI increase in 2021 in Canada?

The CPI increase in 2021 was 4.4% in September, year-over-year. This is the fastest increase in a single month year-over-year since February 2003. 

Are food prices going up in 2021 in Canada?

Yes. According to the 11th annual edition of Canada’s Food Price Report, the overall food price in Canada is forecasted to increase 3% to 5% in 2021. Most significant is an increase in meat prices from 4.5% to 6.5%, bakery prices from 3.5 to 5.5% and vegetables prices from 4.5% to 6.5%.

Why are grocery prices going up in 2021 in Canada?

Grocery prices are going up due to inflation caused by economic responses to the pandemic and climate change. According to a Dalhousie University study on food price inflation, higher input costs and supply chain issues due to unfavorable weather patterns and logistical issues are the largest driving factors.

What will happen if hyperinflation occurs in Canada?

When goods and services prices have risen more than 50% per month over a period of time, this is hyperinflation. As hyperinflation leads to higher prices, consumers will need more money to purchase the same products they did before. Alternatively, companies sometimes shrink the size or quality of their products in response to inflation. This is called “shrinkflation.”

How can I protect myself against inflation in 2021?

It is always wise to have a financial plan to protect yourself against inflation. The first thing you can do is spend less and be more mindful about what you spend your money on. Find cheaper alternatives and budget your expenses. According to the Greenard Group, you can also increase investments and build a well diversified stock and bond portfolio, while staying away from short-term cashable investments and low-interest savings accounts.

Laura McKay

COO & Co-Founder

About the Author

Laura brings 7 years of experience working in insurance & strategic operations as a management consultant at Oliver Wyman, after experiences at Manulife and Munich Re. In 2017, she launched a successful initiative for the World Economic Forum focused on innovation in insurance, working closely with insurers, tech pioneers, and policy-makers.

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