With just a few weeks until the Mar. 1 deadline for the Registered Retirement Savings Plan (RRSP), a new poll suggests that a growing number of Canadians say they can't afford to save or invest, which will lead to a difficult time in the future.
Scotiabank published its annual Investment Poll on Tuesday that shows affordability is the primary factor for the lack of saving and investing among Canadians. Close to two-thirds, up from 59 percent in 2011 and 53 percent in 2010, say they can’t afford to contribute to their nest egg. Similar to figures last year, 39 percent of respondents said they will contribute to their RRSP.
The study found that fewer Canadians have invested enough. The poll showed the number is at 19 percent compared to 24 percent in 2011 and 29 percent in 2010. For those who feel they can’t afford to save, 70 percent said they have not created a financial plan, more than three-quarters are not saving for retirement at all and 80 percent feel they are not on the right track to saving for retirement.
A positive note from the data showed that the number of Canadians who have not begun their investment strategy has declined from last year (17 percent to 21 percent) and 51 percent of Canadians have started to invest before the age of 30 – less than one quarter (23 percent) of those aged 18 to 34 have a written financial plan.
“An investment may be more affordable than you think - the key is to get a solid financial plan in place to help overcome affordability issues," said Mike Henry, Scotiabank Senior Vice President and Head of Retail Payments, Deposits and Lending, in a press release.
“While Canadians rarely get an opportunity for a financial do-over, it is important they take advantage of the investment opportunities they currently have and find a strategy that will work. Within the framework of a good financial plan, even small contributions can have a big impact over time and get people to the place they want to be financially.”
Although the poll found that most Canadians have either an RRSP and/or a TFSA (Tax-Free Savings Account), the personal savings rate in the country is quite low: 2.9 percent. Another survey also suggested that Canadians aren’t even using their TFSA.
The 2012 Scotiabank Investment Poll was conducted online with 1,003 adult Canadians between Nov. 28 and Dec. 13. The margin of error was not reported.