Are Canadian Piggybanks Facing Extinction - Or Are They Just Temporarily Collecting Dust?
Less than a third of Canadians (30%) put away savings every month; 75% are concerned about their lack of savings; 73% believe
- 79% of Canadians say that they have less disposable income than prior years.
- 69% worry about their future financial well-being because they're not putting enough money aside.
- 43% report not typically putting any money aside towards savings.
- 64% say that despite making a decent salary they're worried about making ends meet.
- 60% believe today's new norm is living paycheque to paycheque.
- 73% say that if they can't afford to pay for something - they don't buy it.
"There's no doubt that Canadians feel very concerned about the challenges of not being able to put aside enough money into savings," said
Mixed sentiment around ability to live within financial means : Overall, 37% of Canadians say they're able to live within their income level, and 27% feel good about their personal financial situation. Conversely, almost 3 out of 4 Canadians (73%) say that cost-of-living increases have made it difficult to afford everyday expenses such as groceries, gas, household essentials, etc., and 82% are concerned that their income isn't keeping pace with inflation. One in four (24%) say they struggle to make ends meet, and 64% say that despite making a decent salary, they're worried about paying their bills. Looking ahead, 78% report that they're worried about the cost of living, with 77% who say they plan to reduce their spending (down slightly from 85% in 2023).
Savings are taking a hit: Overall, 79% of Canadians say they have less disposable income than prior years. Around two-thirds of Canadians (66%) feel that they don't have enough money left over from their paycheque at the end of the month to build up their savings. This compares to 30% of Canadians who say they're currently putting money away in savings. A vast majority of Canadians indicate they have a prevailing concern about their lack of savings, with 75% who say they're concerned about not putting enough money into savings (versus 25% who are not concerned), although 54% indicate that they try to ignore the feeling that they need to put more money aside. Looking ahead, 82% say they're likely going to have to put less into a savings account given the increased cost-of-living. Half of Canadians (50%) say they're unable to save money for long-term goals like retirement or a home, as their paycheck goes to their immediate needs.
Canadians indicate they can't rely on savings for unexpected expense s: Nearly half (46%) rely on their credit card to make larger purchases versus tap their savings, and 17% instead rely on installment payment options including buy now pay later (BNPL). More than half of Canadians (57%) worry that they'll have to go into debt or use a credit card if an unexpected expense comes up rather than rely on their savings; for example, to replace an appliance, home repair costs, dental costs, etc. A further 37% worry they'll have to borrow money from family or friends if an unexpected expense comes up.
Perceived new reality of living paycheque to paycheque:
When thinking about the prevailing culture of saving in
Canadians top 3 motivations to save include covering unexpected expenses, avoiding taking on debt, and planning for retirement: Canadians cite a mix of motivations in wanting to be able to put money into savings, including:
- For unexpected expenses (73%)
- To avoid borrowing more money using a credit card or loan (70%)
- Put towards retirement (61%)
- To earn interest in a savings account (46%)
- To splurge on something down the road for themselves such as a vacation, new car, or something they want to treat themselves to (43%)
- Save towards buying a home (25%)
Pragmatic view to affordability – if they can't afford, they don't buy: Overall, Canadians appear to take a pragmatic view when it comes to affordability of purchases, with 73% who say that if they can't afford to pay for something from money in their bank - they don't buy it. This compares to 23% who say if they can't afford something with money in the bank, they typically use their credit card or borrow money; 4% rely on installment payments or buy now pay later (BNPL) payment options.
Canadians embrace tax filing to put money back in their pockets:
Overall, 81% say that this tax season it's more important than ever to maximize their tax refund and minimize any amount they owe. As Canadians look to file their taxes before the
Canadians hold a mix of tax-friendly retirement and savings accounts : While many Canadians say they're struggling to put money into savings, they hold a mix of saving and retirement related accounts and plans including:
- Tax Free Savings Account (TFSA): 58%
- Registered Retirement Savings Plan (RRSP): 51%
- Employer sponsored (registered) pension plan: 33%
- First Home Savings Account (FHSA): 4%
Many Canadians plan to put their tax refund towards building their savings or put it in a tax-friendly savings account: When it comes to ways Canadians plan to use their refund, 25% plan to invest in a RRSP, TFSA or FHSA, and 18% plan to start or contribute towards a 'rainy day' fund or savings.
About the survey
The online survey was commissioned by
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