Pandemic-era savings rates under threat as inflation surges

A majority of Canadians plan to continue spending less and saving at higher levels than they did before the pandemic, but are worried that inflation and the rising cost of housing could prevent them from doing so, according to a new survey.

A majority of Canadians plan to continue spending less and saving at higher levels than they did before the pandemic, but are worried that inflation and the rising cost of housing could prevent them from doing so, according to a new survey.

The Scotiabank survey found that 63 per cent of Canadians polled don't plan on spending the way they did before the pandemic, while 55 per cent are concerned they won't be able to save the way they were able to during the pandemic.

D'Arcy McDonald, Scotiabank's senior vice president of day-to-day banking, said he was surprised that such a large portion of respondents planned to continue spending less.

“If you talked to me in the spring, I would've told you that when restrictions lift and restaurants, patios and travel resumes, that this watershed of savings would be unleashed onto the economy, but that's not true,'' said McDonald.

“Canadians are still embracing the budgeting habits they acquired during the pandemic.''

But he said inflation, rising real estate and rent costs, and higher interest rates could be some of the reasons people feel their ability to save will be hindered in the coming months.