More Canadians are facing challenges to save for retirement security as inflation continues to soar and markets decline, a new survey has found.
The survey, commissioned by the Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data, was conducted from April 21 to 27 surveying 1,716 Canadian adults and published on Thursday. It found that 55 per cent of respondents expressed concern about having enough money to survive in retirement.
Concerns are especially high among Canadians under the age of 35, the survey says, as they’re less likely to own a home or have over $5,000 in savings. Of non-homeowners between the ages of 18 and 34, 75 per cent say they’re worried about their ability to buy a home due to high interest rates, while homeowners of that same age group worry about being able to afford mortgage payments.
The annual inflation rate rose to 7.7 per cent in June, driven higher by prices for housing, gasoline and groceries, Statistics Canada reported on Wednesday.
“The general outlook for retirement security in Canada is darkening,” said David Coletto, CEO of Abacus Data said in a news release.
“Seventy-five per cent of all Canadians agree there is an emerging retirement crisis in Canada and 72 per cent feel that saving for retirement is prohibitively expensive – both up seven points over last year. And, if current trends continue, it will be tougher for younger generations.”
The outlook isn’t necessarily brighter for those who are ready to retire.
Another recent Angus Reid survey found that 62 per cent of those aged 55 or older have delayed retirement because they don’t have enough savings or investments and that 63 per cent of older Canadians are worried about never being able to retire.
There is a general agreement among all generations that better pensions are needed to reduce financial strain and ensure a stronger retirement plan, the survey found.
Of those surveyed in the HOOP study, 82 per cent agreed that “all workers should have access to a pension that guarantees a percentage of their working income in retirement,” and 66 per cent would be willing to accept a lower salary for a better pension.
“Previous HOOPP research with employers, as well as our own members, has confirmed that good workplace retirement savings plans reduce financial stress and elevate peace of mind for workers of all ages,” said Steven McCormick, HOOPP’s senior vice president of plan operations, in a news release.
“And this, in turn, improves productivity for employers.”
Home ownership is considered integral to retirement stability with 45 per cent of Canadians planning to rely on the sale of a home for their retirement plans. But, as the average home price rises at record paces, 58 per cent of respondents are worried about their ability to buy a home by the time they retire.
While saving for retirement was found to be a high priority among 54 per cent of respondents, only 32 per cent said they have yet anything to save.
“Retirement and savings concerns have been high every year we’ve done the Canadian Retirement Survey, and now they’re being exacerbated by rising interest rates and inflation,” said McCormick.
“Well over half of Canadians expect these factors to cause financial challenges and force them to retire later. At the same time, funding retirement through the sale of a home is becoming a less viable strategy for many individuals. It raises the question of whether Canada’s younger generations are headed for a perfect storm on retirement security.”
With files from The Canadian Press and CTVNews.ca’s Brooklyn Neustaeter.