Faced with rising inflation, many Canadians have no ability to contribute to their RRSP
Rising inflation and the resulting increase in living and lifestyle expenses could hurt Canadians’ ability to pay their contributions. More than half (55%) of those who did not contribute to the RRSP this year claimed they could not afford it – up 11% from the previous year.
About a third of Canadians (29%) cannot invest their money at all, while a quarter (25%) consider loan repayment a top financial priority. The remaining 45% of people who are not contributing to their RRSP this year are focusing on other types of accounts or investment options.
Canadians value TFSA contributions (49%), unregistered investment accounts (17%), and real estate purchases (17%) more than RRSP contributions (8%). The age group of 18-34 years is most likely to contribute to the RRSP (42%), and they are also most likely to contribute the maximum amount (16%).
The overall proportion of people in this age group who contributed increased by 7% year over year. On the other hand, this age group was 13% more likely to believe that COVID-19 had hurt their ability to save for retirement (57%), and 8% more likely to revise their financial priorities because of the pandemic. There is a probability of (39) %).
Overall, 44% of Canadians believe the pandemic has hurt their ability to save for retirement, while 31% have shifted their financial priorities as a result of the pandemic. Despite this, nearly half of Canadians (49%) said they manage their finances without the help of a financial counselor.
