Nearly half living pay cheque to pay cheque, fewer saving, and over one-third feel overwhelmed by debt
TORONTO, Sept. 9, 2015 /CNW/ - Canadians are continuing to live pay cheque to pay cheque and are not saving enough, causing many to postpone their retirement (in some cases for several years) a national payroll survey released today has found.
The seventh annual National Payroll Week Research Survey, conducted by the Canadian Payroll Association, reveals that the vast majority of employees are nowhere near reaching their retirement savings goals, and more than one-third (35%) expect to work longer than they had originally planned five years ago, with their average target retirement age rising from 58 to 63 over that period.
Nearly one-quarter (21%) say they'll now need to work an additional four years or more. "I am not saving enough money" was the top reason for delayed retirement, cited by 35% of respondents.
Far behind retirement goals
Three-quarters of working Canadians (76%) say they have put aside less than a quarter of what they will need in retirement (up from an average of 74% over the past three years).
And even among those closer to retirement (50 and older), a disturbing 48% are still less than a quarter of the way to their retirement savings goal.
Half need more than $1 million for retirement
Not only are employed Canadians finding it difficult to save for their retirement, many think they'll need a big nest-egg. Half think they will need more than $1 million in savings when they exit the workforce, consistent with the average over the past three years.
Losing confidence in the economy
Many employees do not expect their financial situation to get better any time soon. Just one-third (33%) expect the economy to improve over the next year (down from an average of 41% over the past three years), while 27% feel the economy will worsen, up 10% from the three-year average of 17%.
Living pay cheque to pay cheque
A large proportion (48%) report it would be difficult to meet their financial obligations if their pay cheque was delayed by a single week (about the same as the average of 47% over the past three years).
The provinces/regions with the highest percentage of employees living pay cheque to pay cheque are: Ontario (52%), B.C. (51%), and Atlantic Canada (50%).
Illustrating just how strapped some employees are, 24% report that they probably could not come up with $2,000 if an emergency arose within the next month.
Fewer able to save, and saving levels are low
While more employees say they are trying to save more (71% now, up from an average of 66% over the previous three years), fewer are actually able to do so, with 62% succeeding in their savings efforts (down from an average of 66% over the past three years).
And their savings levels continue to be meagre. About half (47%) are putting away just 5% or less of their pay. Financial planning experts generally recommend a retirement savings rate of at least 10% of net pay.
Overwhelmed by debt
Over one-third of working Canadians feel overwhelmed by their level of debt (36% versus 35% over the past three years), and 12% of employees say they are not sure they'll ever be debt free.
How payroll professionals can help
With stock markets in flux and the federal election on the horizon, a lot of attention is being paid to the economy and how working Canadians are faring financially. "Canadians are saying they are still having a difficult time making ends meet, and they are not putting enough aside to reach their own retirement goals," notes Canadian Payroll Association President and CEO, Patrick Culhane.
Edna Stack, Canadian Payroll Association Board Chair, explains: "Payroll professionals can help by setting up automatic deductions from an employee's pay cheque to a savings plan or retirement program. This is the most effective way to save for employees, so they can get on the path to a more secure financial future."
This is the Canadian Payroll Association's seventh annual research survey of Canadian employees. The survey is conducted to mark National Payroll Week (September 14-18, 2015).
Survey findings are available for B.C., Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Atlantic Canada. Go to www.payroll.ca for provincial/regional news releases and infographics.
Canadian Payroll Association spokespersons are available across Canada for interviews.
Canadian Payroll Association Research Survey of Employed Canadians
A total of 3,605 employees from across Canada, and from a wide range of industry sectors, responded to an online research survey between June 29 and August 7, 2015, using a convenience sampling methodology. Respondents were asked to complete the research survey by members of the Canadian Payroll Association with whom they work. This Canadian Payroll Association developed Employee Research Survey was conducted by Framework Partners, a market research and strategic planning firm. The survey is consistent with a margin of error of plus or minus 1.6% 19 times out of 20, but as a non-probabilistic methodology was used, a definitive margin of error cannot be expressed.
Payroll Professionals - Keeping Canada Paid™
Canada's 1.5 million employers rely on payroll practitioners to ensure the timely and accurate annual payment of $865 billion in wages and taxable benefits, $290 billion in statutory remittances to the federal and provincial governments, and $163 billion in health and retirement benefits, while complying with more than 190 federal and provincial regulatory requirements.
About the Canadian Payroll Association
Since 1978, the Canadian Payroll Association has annually influenced the payroll compliance practices and processes of over five hundred thousand organizational payrolls. As the authoritative source of Canadian payroll knowledge, the Canadian Payroll Association promotes payroll compliance through education and advocacy.
National Payroll Week
National Payroll Week recognizes the accomplishments of payroll professionals and the Canadian Payroll Association by building greater awareness of the size and scope of payroll and its impact on the Canadian economy.
SOURCE Canadian Payroll Association