Although much of the country is reporting that they live paycheque to paycheque and would be in a difficult situation if their pay was delayed, there are fewer Canadians who are having a difficult time making ends meet.
To commemorate National Payroll Week, the Canadian Payroll Association (CPA) published its fourth annual survey of 3,500 employees Thursday and the study’s results are a mixed bag of both good news and bad news.
Last year, 57 percent reported that they would undergo financial hardship if they missed their weekly paycheck. Fast forward to a year later and the number has declined by 10 percent down to 47 percent, which is still a considerably high number.
It seems the highest number of respondents who are living paycheque to paycheque are residents in the Maritimes (54 percent), Manitoba (53 percent) and Ontario (52 percent). Quebec workers maintained the lowest percentage with 33 percent.
CPA’s study found that more Canadians are saving. Two-thirds of survey participants reported saving more than they were able to do last year, which is up from 40 percent a year ago. Once again, Quebec respondents were leading the rest of Canada with 71 percent.
Even though Canadians are saving more, they are not saving a lot. Digital Journal reported Wednesday that the savings rate in the country is 2.9 percent. The CPA survey also found that nearly half of workers are putting aside less than five percent of their income, which is half of the recommended 10 percent.
Why aren’t people saving more? Debt is the primary obstacle to saving more as two out of every five employees spend at or more than their net income.
Retirement is a touchy issue right now in Canada. A recent poll found that a significant portion of individuals in their 50s plan to work part-time in their retirement years. Thursday’s study suggested similar findings with 41 percent noting they’ll have to work longer in their winter years because “I’m not saving enough money for retirement.”
Respondents were asked how much of their retirement goal they have achieved, and nearly three-quarters said they have saved less than a quarter of retirement savings target. When it comes to retirement, though, many are re-assessing their retirement needs as 34 percent (42 percent in 2011) said between $500,000 and $1 million is good enough to live comfortably in retirement. Meanwhile, 38 percent believe between $1 million and $3 million is a needed sum.
“This year’s survey shows that more Canadian employees are now able to save more, and fewer are living pay cheque to pay cheque,” said Caroline Bernard, CPA Chairman, in the news release. “However, only 13% have saved half or more of their retirement funds goal.”