Nearly three-quarters (71 per cent) of Canadians say saving for retirement is a challenge amid rising inflation, an increase of six percentage points over 2021, according to a new survey by BDO Canada.
The survey, which polled more than 2,000 Canadian adults, found 43 per cent said they’ve also cut their savings for retirement. As a result, 64 per cent of respondents aren’t on track to save enough — a jump of four percentage points in the last year. As well, roughly half of these respondents noted they’re very far behind in their retirement savings.
Read: Survey finds Canadians’ financial well-being continues to decline amid rising inflation
More than three-quarters (78 per cent) of respondents indicated the primary reason they’re saving less for retirement is increased spending on groceries, rent or mortgage and other essentials, a percentage that increases to 91 per cent among respondents from Atlantic Canada. Notably, 67 per cent of respondents aged 18 to 24 said they have no retirement savings at all. Overall, 32 per cent of all respondents said they have no retirement plan and another third said they expect to continue working part time or occasionally, despite wanting to retire.
The survey also found 78 per cent of respondents said their personal finances have worsened due to inflation, while more than half (54 per cent) said they’re living paycheque to paycheque, an increase of three per cent over 2021. Six in 10 Canadians are also either saving less or not at all — especially for retirement — than they were in 2021.
“The findings from this year’s affordability index highlight the increasing proportion of Canadians who are struggling to keep up financially,” said Nancy Snedden, national leader of BDO’s debt solutions practice, in a press release. “With inflation and rising costs, affordability challenges have returned to and, in some cases, surpassed pre-pandemic levels. It’s concerning to see that Canadians are experiencing more financial difficulties today compared with the last three years.”
Read: Canadians’ financial well-being on the decline: survey