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.