HOOPP and Abacus Data Release the 2024 Canadian Retirement Survey
When people talk about their retirement, it often focuses on freedom from work, spending time with friends and family, perhaps travelling the world on luxury cruises.
But the retirement dream may never be realized for millions of Canadians who are woefully unprepared for their post-work years, according to new research from the Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data which suggests a bleaker future could be ahead, especially for women.
The HOOPP 2024 Canadian Retirement Survey found that 49% of women have less than $5,000 saved compared to 33% of men, while 22% of all respondents have no savings at all. The survey was conducted among adults over 18 during April 2024.
More than one in three women aged 55-64 have no savings at all, compared to one in five men in the same age group, and this cohort of women are by far the most likely to have nothing saved, followed by 30% of women aged 35-54 (compared to 20% of men in the same age group).
Almost six in ten unretired poll participants said they do not feel at all prepared for retirement, again more women (64%) than men (49%) said this.
While almost half of the men who took part said they have enough income to save, this falls to just over one third among women, who are also more concerned about keeping up with everyday expenses and the impact of inflation on their income.
“We know women make less money than men and they are more likely to work part-time or take time off work to have children or look after their families,” said Ivana Zanardo, Head of Plan Services at HOOPP. “Factor in rising expenses and prolonged high interest rates and it’s no surprise that their retirement security is paying the price.”
Delayed retirement
As has been highlighted in other recent surveys, many Canadians are concerned that they may have to work longer than planned or never retire due to financial pressures. The HOOPP study reveals that 13% unretired Canadians don’t think they’ll ever retire and 26% plan to continue to work in retirement in order to support themselves.
Respondents also noted how financial worries impacted their mental health, again women were more likely to say they felt anxious, fearful, frustrated, or sad about their financial situation.
“Over the last few years, we’ve seen Canadians struggle to keep up, first with inflation and now with interest rates and the cost of living,” said David Coletto, CEO, Abacus Data. “But a small cut in interest rates won’t provide enough relief for Canadians, who told us they expect rates to continue to impact their ability to save even if they decrease slightly in the short-term.”
The survey also found that workplace pensions are considered important by most respondents, and 70% would give up some of their salary to get a (better) pension.
Earlier today, HOOPP released a press release highlighting new research from it and Abacus Data that finds half of Canadian women have less than $5,000 in savings and most Canadians feel unprepared for retirement:
Toronto, June 20, 2024 – Amidst a rising cost of living and persistent interest rates, Canadians’ retirement outlook is particularly bleak, according to the results of the 2024 Canadian Retirement Survey from the Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data. It’s an especially challenging environment for women, as they struggle to balance the cost of daily life with saving for retirement.
While the survey of 2,000 Canadians found one in five (22%) have no savings at all, Canadian women report having less in savings and a reduced capacity to save compared to men. Half (49%) of women have less than $5,000 in savings, compared to a third (33%) of men.
“We know women make less money than men and they are more likely to work part-time or take time off work to have children or look after their families,” said Ivana Zanardo, Head of Plan Services at HOOPP. “Factor in rising expenses and prolonged high interest rates and it’s no surprise that their retirement security is paying the price.”
It’s against this economic backdrop that a majority (57%) of unretired Canadians don’t feel prepared for retirement, including 64% of women and 49% of men. As women report having lower savings than men, they’re also less likely to have enough money coming in to save (36% of women compared to 48% of men), and much more likely to be concerned about the cost of daily life (76% vs. 65%) and their income keeping up with inflation (69% vs. 57%).
Affording the day-to-day is the top financial priority for women (57%, compared to 49% of men), while men focus more on saving for retirement (51%, vs. 46% of women). Even so, all Canadians continue to feel concerned about affording daily life (70%) amidst a challenging economy.
“Over the last few years, we’ve seen Canadians struggle to keep up, first with inflation and now with interest rates and the cost of living,” said David Coletto, CEO, Abacus Data. “But a small cut in interest rates won’t provide enough relief for Canadians, who told us they expect rates to continue to impact their ability to save even if they decrease slightly in the short-term.”
As they manage these mounting financial pressures, many Canadians find themselves facing a different future than they may have anticipated, with some removing retirement from their plans entirely. One in ten (13%) unretired Canadians don’t think they’ll ever retire and one in four (26%) plan to continue to work in retirement in order to support themselves.
Finances negatively impacting Canadians’ mental health, especially women
The strain on Canadians’ finances is also affecting their overall wellbeing, with women much more likely to be affected. Significantly more women feel anxious (51% of women compared to 39% of men), fearful (50% vs. 37%), frustrated (50% vs. 42%) and sad (46% vs. 36%) about their financial situation.
At the same time, women are more likely than men to be concerned about:
- housing affordability (66% of women, compared to 51% of men)
- having enough money in retirement (63% vs. 52%)
- their mental health (49% vs. 35%)
These pressures have left many women in an untenable position as they get closer to retirement age, as more than one in three (36%) aged 55-64 have no savings at all, compared to one in five (22%) men in the same age group. In fact, women in this age group are by far the most likely to have nothing saved, followed by 30% of women aged 35-54 (compared to 20% of men in the same age group).
Almost half (49%) of unretired adults have saved nothing for retirement in the last year, as all Canadians continue to worry about having enough money in retirement (58%). Even as they navigate a challenging economic environment, the vast majority (70%) of Canadians continue to agree they would trade some of their salary for a pension (or a better pension).
The findings provide a compelling explanation for why this is: almost half (49%) of unretired women with a pension feel prepared for retirement, compared to just 29% of those without a pension. For unretired men, this increases to 66% of those with a pension and 40% without.
Canadians also recognize the important role good workplace pensions play in Canada’s economy. Seventy-seven per cent agree that without good pensions in place, the economy will suffer, while three-quarters (75%) believe that if workers aren’t able to access good workplace pensions and contribute during their working lives, they will become a burden on taxpayers.
“By improving access to good workplace pensions we can help prevent these challenges from further eroding Canadian women’s retirement security,” said Zanardo. “At the end of the day, women and all Canadians deserve to feel confident in their financial future.”
These findings are based on a survey conducted online with 2,000 Canadians aged 18 and over from April 12 to 16, 2024. A random sample of panelists were invited to complete the survey from a set of partner panels based on the Lucid exchange platform. These partners are typically double opt-in survey panels, blended to manage out potential skews in the data from a single source. The margin of error for a comparable probability-based random sample of the same size is +/- 2.19%, 19 times out of 20. The margin of error will be larger for data that is based on sub-groups of the total sample. The data were weighted according to census data to ensure that the sample matched Canada’s population according to age, gender, educational attainment and region. Individuals who identified their gender as something other than "male" or "female" were weighted out of the gendered analysis due to their small sample size (N=9). Totals may not add up to 100 due to rounding.
About the Healthcare of Ontario Pension Plan
HOOPP serves Ontario’s hospital and community-based healthcare sector, with more than 670 participating employers. Its membership includes nurses, medical technicians, food services staff, housekeeping staff, and many others who provide valued healthcare services. In total, HOOPP has more than 460,000 active, deferred and retired members.
HOOPP operates as a private independent trust, and is governed by a Board of Trustees with a sole fiduciary duty to deliver the pension promise. The Board is jointly governed by the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses’ Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees' Union (OPSEU), and the Service Employees International Union (SEIU). This governance model provides representation from both management and workers in support of the long-term interests of the Plan.
I invite you to read the 2024 Canadian Retirement Survey here.
Below, some highlights for the Executive Summary:
Again, take the time to read the Executive Summary here and full report here.
On Wednesday, I had a chance to speak with Ivana Zanardo, Head of Plan Services at HOOPP to go over the survey.
I want to thank her for taking some time to speak with me and also thank Jackie Emick for setting up the call.
I began by telling Ivana that while the report didn't surprise me, it is disconcerting and troubling.
I mean we all pay groceries, $5,000 in savings doesn't buy you half a year of groceries ad if there is an emergency expense (car breaks down, home repair, etc.), you're done!
These surveys that HOOPP commissions Abacus Data to do also highlight an ongoing issue that I've been writing about for years, pension poverty, and how it strikes women harder than men.
Ivana commented: "We are going to keep talking about it and inform people so hopefully we can affect some change in the future."
Keep in mind, HOOPP is a pension plan that provides great, secure pensions to its members but it also does a lot of advocacy work on pensions which you can read here.
Anyway, Ivana began by giving me the highlights:
As you know, we do this research every year and this is year 6. We have consistently heard that Canadians are struggling in the face of rising cost of living and high interest environment to save for retirement.
What was particularly noteworthy for me with this research is the impact is has on women. The statistics have told us although one in five Canadians had no savings, but half of women have less than $5,000 in savings.
To dig a little bit deeper into that, women that are closer to retirement so between ages 55-64, one in three have no savings at all. That is particularly challenging for women.
I interjected and said basically they're relying on the Canada Pension Plan which isn't much to get them through retirement and my question was whether they're also relying on their house as a form of savings to get them through retirement and the high interest rate environment is adding financial stress as mortgage rates get reset higher.
On why this is impacting women harder, Ivana shared this:
I think there's two main factors. One is the gender pay equity gap. We know that women on average make 71 cents for every dollar a male makes. And also women tend to spend less time in the workforce because they're taking time off to raise their children, take care of the family, elder care tends to fall more to women as well.
So when you start off with those two factors, what is shows you is as they prepare for retirement, they have less opportunity to save.
We also know that given the circumstances they're in, women tend to prioritize day to day expenses to retirement savings whereas men will prioritize retirement savings.
Again, I pressed her is this because women tend to put all their money into buying a house and that explains why they have little to no savings because their retirement strategy is to sell the house to finance their retirement.
Ivana commented:
In older women, as they prepare for retirement, one and three have no savings at all. I think it's going to continue being a challenge for them. What we want to advocate for is for better access to retirement savings for all Canadians. There's lots we can do to advocate for that so as women who are still in the workforce will be able to have that access and be able to save for retirement.
We've heard consistently over the years that 2/3 of Canadians are willing to give up pay to have access to a pension. So Canadians know the answer, and the more we continue to advocate for that retirement security for pensions, the more people are talking about access, the more we can continue this momentum.
I asked her what are they doing to engage with key policymakers given this is a real issue that not only affects the retirement security of Canadians, it also affects our economy over the long run.
Ivana replied:
We are the Healthcare of Ontario Pension Plan, our mission is to provide pensions for our members and we are focused on that. In addition to that, we do this research and it's really important for us to do this research because we believe strongly as pension experts, it's our responsibility to raise awareness.
So as a result of this research, we want to continue to inform that national dialogue so governments can continue to look at their framework, to continue to be open to allow for access to pensions where there isn't any. For businesses to be aware that providing pensions for their employees is good for business. It's good for employees and their well-being but it's also good for business.And for individual consumers, we want to continue advocating for access to a retirement savings plan because it's also good for the economy.
I completely agree and I told her what is eye-opening about this research is I used to cover at length the looming American retirement disaster but now I realize Canada isn't far behind and while I write about the Maple Eight, Nine, Ten, Eleven, the truth is only a small subset of the population is well covered with a defined benefit plan in Canada.
And HOOPP is fulfilling its mission to provide its members, most of which are women, with a modest but secure pension and that's good because they're doing their part to fight the ongoing pension poverty afflicting more women than men.
I also stated that it seems like a disaster tin the making and nobody is talking about it and until we hit the proverbial brick wall, everyone is oblivious to this ongoing problem.
Ivana interjected:
Well, you and I are talking about it this morning. I know you have a broad reach in your readership so they will be reading about it and will continue to talk about it as well.
As you highlighted in your statement, the majority of our members are female. Over 80% of our members are women. Also, a third of our active members are part time. Both demographics that traditionally may not have access to retirement savings.
We are really proud at HOOPP to provide that retirement security to our members. Just this month, our board approved another increase to pensions to continue to reinforce the importance of providing that security.
I asked if that was to reflect the increase in cost-of-living and she replied:
No, we increased pensions for our active members, an average of $300 per year of service. That goes a long way. It recognizes the strong position that our plan is in and continues to provide that enhancement in our members' retirement.
That's what we should strive for for everyone in Canada.
I then asked her about something else that struck me form the report, namely, the mental health anguish that women are feeling for their lack of savings for retirement.
Ivana commented:
I think the lack of preparedness women face for their retirement savings leaves them feeling more anxious, more fearful, more frustrated and is not good for their mental well-being, that's for sure.
In terms of dealing with the interest rates, it was great to see a reduction in the rate from the Bank of Canada recently but in our research, 2/3 of Canadians feel rates will continue to impact their ability to save.
She confirmed that the continuing rise in the cost of living and higher rates are having a significant impact on the ability of Canadians to save.
We moved on to discuss solutions to this ongoing problem. I noted the perception out there is pensions are costly and businesses consider it an added cost.
Ivana commented:
Recall the research we did in the fall where we surveyed businesses. And it was in that research where we learned businesses are starting to recognize the benefit to their bottom line by providing retirement security. They recognize the impact it has on their employees well-being. We know that if employees are not financially secure, stressing about retirement, they're not as productive at work.
Businesses are recognizing that. It was really good that the number of people that are offering retirement savings plans or menacing what they're offering, has increased. I think it went from 17% to 23% of businesses that offer a retirement savings program or increased what they have (Jackie confirmed this: "More employers recognize the advantages of offering retirement benefits, with 23% (+6 pts since 2022) introducing or enhancing their retirement benefit offerings this year or next").
So businesses are starting to recognize it and I think the more we continue to release, the more we continue to advocate for Canadians, the more we continue to get this research out, the better it will be.
I agree with that and am happy that businesses understand that providing more retirement security is a productivity enhancer and good for their bottom line.
I told Ivana I'd like to help HOOPP to get the message out to the right channels, particularly in the Canadian Senate.
She replied:
Absolutely. As pension experts, we are in it day in and day out, talking pensions, breathing pensions, so we know the value that a pension has to individuals.
In my role here at HOOPP, I am fortunate to be able to interact with members and I hear back the positive impact that this HOOPP pension has for them. We want everybody to have access.
She added they get hand written notes from members thanking them when cost-of-living-adjustment is applied every year in April after board approval. She was particularly touched by 95-year-old members who write in to thank them stating it "just reinforces why we continue to do this research and advocate for retirement security for all Canadians."
I told her that even younger well to do people I know who don't have access to a pension tell me that retirement is a dream with the cost of living exploding up.
I ended by asking he what are the next steps. She replied:
We will continue to do this research, we will continue to learn, we will continue to promote it and talk to people like you that will also promote it so we can affect change and we can continue to towards all Canadians have access to retirement security.
We ended it off on that beautiful note.
Once again, I thank Ivana and Jackie for this insightful discussion and I hope all Canadians do their part to raise awareness.
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