TORONTO, June 15, 2023 (GLOBE NEWSWIRE) — A prolonged period of rising inflation and interest rates has led to another significant downturn in the financial wellbeing of adult Canadians, risking their retirement readiness and security, according to the 2023 Canadian Retirement Survey from Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data. Findings for the 55-64 age group, in particular, suggest retirement may be an increasingly elusive dream even for older adults who should be the most prepared.
The survey of 2,000 Canadians found almost half (44%) did not set aside money for retirement in the past year, an increase of 6% over the previous year. The impact of inflation is clear: cost of daily living remains the top concern (70%), followed by income keeping up with inflation (66%).
Even as they struggle with day-to-day costs, Canadians continue to think about their long-term financial picture. Having enough money for retirement is the fourth top concern (59%). And more than two-thirds (69%) would take a lower salary for any (or better) pension.
“The number of Canadians willing to sacrifice pay for pension has held firm over the five years that we have done this survey, including now, in a year when you might expect immediate financial needs to prevail,” said Ivana Zanardo, Head of Plan Services, HOOPP. “It demonstrates the degree to which Canadians value workplace retirement savings plans, and their willingness to do their part to get one.”
This year’s data showed Canadian adults at every age struggling to save for retirement, but there were some particularly troubling trends amongst the 55-64 group – an age when, ideally, many people are preparing to transition into their retirement years:
- 44% of the non-retirees in this group have less than $5,000 in savings and 75% have $100,000 or less in savings;
- One in five workers say they have not set aside anything for retirement;
- More than half (54%) said that if inflation continues to rise, they will need to push out their target retirement date.
This is also the group most likely to say they are falling behind in their standard of living, at 38% (the figure for all Canadians was 33%).
“In the five years that HOOPP and Abacus Data have conducted this survey, about 70% of Canadians have consistently agreed that Canada is heading for a retirement income crisis,” said David Coletto, CEO, Abacus Data. “These findings for older Canadians suggest a crisis might be looming ever closer if current economic trends continue.”
Things also remain challenging for younger adults, 18-34. Half (51%) said they are living beyond their means, not by choice, compared to only 31% of those aged 35+. The 18-34 group is among the most concerned about their income keeping up with inflation (67%), housing affordability (65%) and ever having access to a workplace pension (45%). They are also very concerned about how higher interest rates impact their ability to save for retirement (86%) and reduce debt (83%).
“The kids are not all right when it comes to retirement saving – we’ve known this for a while – but neither, as it turns out, are their parents,” said Zanardo. “Declining access to workplace pensions as well as high housing costs have been taking a toll for years. But more recently, high inflation and interest rates have been added to what may be a perfect storm for folks struggling to save.”
At any age, Canadians know the solution. In addition to the 69% who would take less pay in exchange for a better (or any) pension:
- 80% agree that reasonable pay cheque deductions are an effective way of helping Canadians save for retirement;
- 78% believe that all employers should be required to contribute in some way towards pensions for workers;
- 76% believe that governments can save money by supporting pensions that are more affordable and 74% agree that if workers cannot access good workplace pensions, they will become a burden on taxpayers.
The Canadian Retirement Survey is the first of two major research releases from HOOPP in 2023. In the fall, HOOPP will release the third annual Canadian Employer Pension Survey. Last year’s study found an encouragingly high number of employers (17%) were adding or improving retirement benefits.
“We look forward to seeing if that positive trend continues,” said Zanardo. “It’s never been more important.”
These findings are based on a survey conducted online with 2,000 Canadians from April 21 to 28, 2023. The margin of error for a comparable probability-based random sample of the same size is +/- 2.17%, 19 times out of 20. The margin of error will be larger for data that is based on sub-groups of the total sample. The data were weighted according to census data to ensure that the sample matched Canada’s population according to age, gender, educational attainment, and region. See more detailed results here.
About the Healthcare of Ontario Pension Plan
HOOPP serves Ontario’s hospital and community-based healthcare sector, with more than 630 participating employers. Its membership includes nurses, medical technicians, food services staff, housekeeping staff, and many others who provide valued healthcare services. In total, HOOPP has more than 435,000 active, deferred and retired members.
HOOPP operates as a private independent trust, and is governed by a Board of Trustees with a sole fiduciary duty to deliver on the pension promise. The Board is jointly governed by the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses’ Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees’ Union (OPSEU), and the Service Employees International Union (SEIU). This governance model provides representation from both management and workers in support of the long-term interests of the Plan.
About Abacus Data
Abacus Data is an innovative, fast-growing public opinion and marketing research consultancy. They use the latest technology, sound science, and deep experience to generate top-flight research-based advice to clients. They offer global research capacity with a strong focus on customer service, attention to detail and exceptional value. Abacus is the only research and strategy firm that helps organizations respond to the disruptive risks and opportunities in a world where demographics and technology are changing more quickly than ever. To learn more visit: abacusdata.ca
James Geuzebroek, Director, Media & External Communications