By Vanessa Santilli
The Catholic Register
OTTAWA
www.sxc.hu
Canadians need to pay attention to increasingly high levels of youth and senior debt, said Nora Spinks, CEO of the Vanier Institute of the Family.

The institute highlighted a looming crisis in its recently published report "The Current State of Canadian Family Finances." The study looks at family income and expenses, family savings and debt, and family wealth and net worth.

"We've got the young adults and young families with high levels of debt trying to make ends meet, and then we have seniors who are declaring bankruptcy, and that leaves those in the middle supporting their young adult children and their parents."

This means adults currently in their 40s and 50s will have no money left for their own retirement, Spinks said.

"For the first time we're seeing more retirees with significant debt and a portion of the population over 65 that has more than $100,000 in debt."

The report also found that family income is not increasing as rapidly as expenses.

"And because their income and expenses are so tight, it's really difficult for them to save or pay off their debts," she said. "Most of their debts are related to things like their own education expenses."

The average debt load per household now stands at $103,000, while annual savings have decreased by two-thirds, according to the report. To deal with this, families are having to find more sources of income.

"We're seeing more families supplementing their primary income with other kinds of work; they have one job during the day, but they have a secondary job evenings and weekends."

Longer lifespans have also had a big impact on pensions. Planning for retirement used to mean preparing for a couple years, but now retirement lasts about 25 years, said Spinks.

"The amount of time we're spending generating income proportionate to our lifespan is only about a third. In the past it was almost 75 per cent of our lifespan."

With longer lifespans come an array of social advantages, such as kids being able to get to know their grandparents and great-grandparents, she said.

"Families have adapted to that. Our social economic infrastructure, our employment structure, and our labour market haven't adjusted as quickly."

Financial literacy and education about money management is an absolute necessity, and must start at an early age, she said.

"We need to help kids right through to people planning and preparing for retirement to understand savings, expenses, and costs.