By: Healthcare of Ontario Pension Plan (HOOPP)
It's been another challenging year for Canadians as they continue to navigate their finances through stubbornly high inflation, rising interest rates and expensive housing. And based on results from this year's Canadian Retirement Survey by the Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data, these economic factors are taking a financial toll on older working Canadians who, ideally, should be better positioned as they approach retirement.
Can we help prevent the same experience for younger generations?
Saving early and often goes a long way in securing a retirement income, but it isn't always so simple to do without the support of a workplace pension plan, something many Canadians don't have. The cost of daily living remains the top concern for Canadians of all ages (70%) but saving for retirement is hot on its heels. Sixty-four per cent of those between 55-64 are concerned about having enough money in retirement. This worry doesn't come as a surprise as more than three-quarters of those within this age group, who are not already retired, have $100,000 or less in savings; almost half have less than $5,000 in savings.
Saving is no easy feat for younger Canadians either when they are trying to pay for today and build their tomorrow. The data shows most Canadians under 35 are worried about their income keeping up with inflation and affording a house. The majority are also concerned about the impact of higher interest rates on their ability to save money (91%), save for retirement (86%) and reduce debt (83%).
“The kids are not all right when it comes to retirement saving 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."
Workplace pension plans can help both older and younger Canadians, and ensure the younger ones are in a better financial position to retire when the time comes. Whether retirement is around the corner or years from now, members of HOOPP are well positioned for a comfortable retirement. HOOPP members contribute from each pay cheque during their working years, and their employer contributes too. That is the power of a good workplace pension plan.
The solution is clear: more workplace pension plans like HOOPP are needed. Canadians continue to recognize improved access to good workplace pension plans as one solution to current and continued financial challenges, and they are willing to pay for it. In addition to the 69% of Canadians who would take less pay in exchange for a better (or any) pension:
A majority (80%) agree that reasonable pay cheque deductions are an effective way of helping save for retirement and that all employers should be required to contribute towards their employees' pensions (78%).
A majority (74%) agree that if workers cannot access good workplace pensions, they will become a burden on taxpayers.
The financial struggles of Canadians close to retirement serve as a warning for all. Most Canadians (86%) agree we have a moral obligation to ensure children will have pensions like earlier generations had. When more Canadians have access to a secure retirement, we all benefit. That's why HOOPP remains focused on our mission of delivering our pension promise to the healthcare workers of Ontario, and continues to advance the conversation on retirement security in Canada through research and advocacy.
Learn more about our latest research by visiting hoopp.com.