Ten million Canadian adults experienced moderate to high income volatility in the last year, a new TD Bank Group survey says. More than three million see their monthly incomes fluctuate 25 per cent or more.
Income volatility is income that is inconsistent, unstable, and that sees significant fluctuation on a monthly basis.
Canadians with high income volatility are more likely to feel stressed financially and have lower overall financial health, says the survey. In addition, they are more likely to fall behind financially and lack confidence in their financial future, says the report released May 17.
Impact is pervasive and profound
“Our aim was to take an emerging issue – income volatility – and to shed light on how it’s affecting the day to day lives of Canadians,” says Bharat Masrani, group president and chief executive officer of TD Bank Group. “Our findings suggest the impact is both pervasive and profound – making it hard for many people to live the life they want today, let alone plan for and feel confident about their future. It’s a subject worthy of closer examination,” he says.
Income volatility affects part-time, seasonal, and self-employed workers most, says the survey. Lower income Canadians are more susceptible as well, in addition to young women, and men aged 45-54. The top three causes of income volatility are irregular hourly pay, multiple sources of variable income, and self-employment.