Most Canadians have not set aside anything for retirement in the past year (63%) which is up 5% since last year, according to the third annual Canadian Retirement Survey from Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data. The survey also found a widespread belief that better access to workplace pensions is needed to avoid a retirement crisis.

The findings, based on an April 2021 survey of 2,500 Canadians, affirm there is a high level of anxiety among Canadians about their ability to save for retirement. Half (48%) said they are “very concerned” about not having enough money in retirement. This was more than concern for one’s own physical health (44%), mental health (40%), debt load (31%) and job security (26%).

“After more than a year of COVID-19, Canadians remain steadfast in their personal and societal concerns around retirement security,” said Steven McCormick, SVP, Plan Operations, HOOPP. “As day-to-day financial pressures mount for some and ease for others, Canadians across the board are acutely aware of the importance, and challenge, of saving for retirement.”

Almost half (46%) of Canadians said they’ve saved more money during COVID than they otherwise would have. However, of these, half (52%) set aside nothing for retirement during the past year. Of those who said they saved less than usual, 72% saved nothing for retirement.

The COVID-19 pandemic harmed the finances of half of Canadians (52%) and did so disproportionately amongst the younger and lower-income groups. Canadians aged 44 and younger are twice as likely to have had their finances greatly harmed (24%) than Canadians 60+ (11%). Likewise, Canadians earning less than $50K are twice as likely to have had their finances greatly harmed (25%) than those earning $100K+ (12%).

“The pandemic has exacerbated the divide between those who can save for retirement and those who can’t,” said Abacus Data Chief Executive David Coletto. “Those who are the least likely to save – younger and lower-income Canadians – were the hardest hit by the health crisis. This year’s results also show widespread agreement that employers can play an important role in making saving for retirement more affordable.”

Regardless of one’s current finances or the impact of COVID, there are widespread and consistent concerns about having enough money for retirement. Of those making $50K or less, 52% said they were very concerned; and even amongst those making more than $100K, a full 42% said they were very concerned. When asked why they hadn’t saved for retirement, the most common response was living paycheque to paycheque, with one in three (36%) identifying with this reality.

This year’s results once again confirm that Canadians continue to think long-term and big picture on retirement issues. Two-thirds (67%) agree there is an emerging retirement crisis and 65% said that saving for retirement is prohibitively expensive.

For the third straight year, Canadians also widely recognize that workplace pensions are key to the solution. Around 71% are willing to forgo a higher salary for a (better) pension plan (74% last year); 77% say employers have a responsibility to offer a pension plan (76% last year); 75% agree that without good pensions in place, the economy will suffer; and 74% said that, in the absence of good workplace pensions, individuals will become a burden on taxpayers (77% and 76% respectively last year)
“These findings, consistent with prior years, point to a clear desire amongst Canadians for greater access to workplace pensions,” said McCormick. “As business leaders and decision-makers plan for our post-COVID ‘new normal,’ it’s clear that Canadians would strongly support improvements to retirement security for everyone.”

The survey was conducted between April 19 and 27, 2021. The margin of error is + / – 1.96, 19 times out of 20.

 

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