Canadians willing to sacrifice pay for better pensions despite the growing financial strain
A significant downturn in financial well-being due to prolonged rising inflation, volatile markets, and a lack of affordable housing, is impacting the retirement readiness and security of many Canadians, says the fifth ‘Canadian Retirement Survey’ by Healthcare of Ontario Pension Plan (HOOPP).
In fact, the survey shows most Canadians express a willingness to sacrifice pay for a better pension despite the growing financial strain.
Nearly half of employed Canadians (44 percent) did not set aside any money for retirement in the past year, an increase from 2022. The cost of daily living remains the top concern (70 percent), followed by income keeping up with inflation (66 percent). If inflation continues to rise, 87 percent of survey respondents anticipate day-to-day expenses becoming less affordable, 64 percent foresee an increase in debt, and 60 percent expect to delay their target retirement date.
In addition, half of Canadians under 35 (51 percent) admit to living beyond their means, even though they are particularly concerned about higher interest rates. This age group is also more likely to worry about debt (48 percent) and a lack of workplace pensions (45 percent). Despite financial challenges, they remain more optimistic about their current standard of living compared to older age groups.
Adults aged 55-64 report falling behind in their standard of living (38 percent), with 54 percent agreeing they may need to postpone their retirement due to rising inflation. Thirty-two percent of working Canadians have never saved for retirement, including one in five pre-retirement workers. As well, 44 percent of pre-retirement adults have less than $5,000 in savings, with 75 percent having $100,000 or less.
Canadians across age groups (69 percent) would prefer a lower salary for a better pension. Those with pensions are more likely to believe they are getting ahead in their standard of living (41 percent) compared to those without pensions (27 percent). The majority (86 percent) believe it is in everyone's interest for more people to have better retirement savings. Seventy-eight percent agree that all employers should contribute towards pensions for workers.
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