A majority of Canadian employees are living paycheque to paycheque and report they would be in financial difficulty if their pay were delayed by even a week, according to a new survey on the financial health of the country’s workers.
The survey by the Canadian Payroll Association also found 40 per cent of Canadians now report they expect to retire later than they had previously planned, acknowledging they are not saving enough for retirement.
The main reason for low savings is that most workers are living “close to the line,” the CPA reported, with 57 per cent reporting they would be in difficulty if their pay were delayed by even a week. That number jumps to 63 per cent for workers aged 18 to 34, and to 74 per cent for single parents.
The regions with the highest percentages of people living paycheque to paycheque were Atlantic Canada, at 64 per cent, and Ontario, at 60 per cent, which the CPA said could be the result of their slower recovery since the last recession.
Almost three-quarters of the 2,070 employees who responded to the CPA online survey this summer said they have saved less than a quarter of their retirement goals.
“This is particularly troubling when you realize that 71 per cent of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54,” said CPA chairman Dianne Winsor.
The survey found 63 per cent of workers estimate they will need more than $750,000 in savings to retire, and 38 per cent estimated they need over $1-million. However, 50 per cent of workers also reported they are saving less than 5 per cent of their net pay, and 40 per cent reported they were not even trying to save more than that amount.
The CPA report said the good news is that workers appear to understand what they could do to improve their financial situation, saying they should spend less, pay off credit card debt, reduce their mortgage and contribute more to retirement savings. Almost 70 per cent said their first or second priority would be to pay off their debt if they won $1-million from a lottery.