HOOPP and Abacus Data reveal women face greater financial challenges in saving for retirement
The 2024 Canadian Retirement Survey by the Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data reveals a bleak retirement outlook for Canadians amidst a rising cost of living and persistent interest rates.
Women, in particular, struggle to balance daily expenses with saving for retirement.
The survey, conducted among 2,000 Canadians, found that 22 percent have no savings. Women report lower savings and a reduced capacity to save compared to men, with 49 percent of women having less than $5,000 in savings, compared to 33 percent of men.
Ivana Zanardo, head of Plan Services at HOOPP, explains that women typically earn less than men, work part-time more often, and take time off for family responsibilities. Rising expenses and prolonged high interest rates exacerbate their retirement insecurity.
A majority of unretired Canadians, 57 percent, do not feel prepared for retirement. This includes 64 percent of women and 49 percent of men.
Women are less likely to have sufficient income to save (36 percent compared to 48 percent of men) and are more worried about daily costs (76 percent vs 65 percent) and inflation (69 percent vs 57 percent).
Women's primary financial concern is affording daily life (57 percent, compared to 49 percent of men), while men focus more on saving for retirement (51 percent vs 46 percent).
David Coletto, CEO of Abacus Data, observes that Canadians have struggled with inflation and now face high interest rates and increased living costs. A small cut in interest rates may not provide sufficient relief, as Canadians expect rates to continue affecting their ability to save.
Many Canadians adjust their retirement plans due to financial pressures, with 13 percent of unretired Canadians believing they will never retire and 26 percent planning to work during retirement to support themselves. Financial strain also impacts mental health, particularly among women.
Women are more likely to feel anxious (51 percent vs 39 percent of men), fearful (50 percent vs 37 percent), frustrated (50 percent vs 42 percent), and sad (46 percent vs 36 percent) about their financial situation.
They also express greater concern about housing affordability (66 percent vs 51 percent), having enough money for retirement (63 percent vs 52 percent), and mental health (49 percent vs 35 percent).
Women nearing retirement age face significant challenges, with 36 percent of women aged 55-64 having no savings, compared to 22 percent of men in the same age group. Women aged 35-54 also report higher rates of having no savings (30 percent vs 20 percent of men).
Nearly half of unretired adults (49 percent) saved nothing for retirement in the past year, and 58 percent of Canadians worry about having enough money for retirement. Despite these concerns, 70 percent of Canadians would trade some salary for a pension or a better pension.
The survey underscores the importance of good workplace pensions. Almost half of unretired women with a pension (49 percent) feel prepared for retirement, compared to 29 percent without a pension. Among unretired men, 66 percent with a pension feel prepared, compared to 40 percent without.
Canadians recognize that good workplace pensions benefit the economy, with 77 percent agreeing that without them, the economy will suffer, and 75 percent believing that inadequate pensions will burden taxpayers.
Zanardo concludes, “Improving access to good workplace pensions can prevent these challenges from further eroding Canadian women’s retirement security. Ultimately, women and all Canadians deserve confidence in their financial future.”
