Majority of Canadian employees living paycheque to paycheque, not saving enough for retirement. Younger workers and single parents having most trouble making ends meet.
TORONTO, Sept. 14 /CNW/ - Results from a new nationwide survey show that a majority of working Canadians are cash-strapped and have little ability to put money away for their retirement.
According to the 2009 National Payroll Week Employee Survey, conducted by the Canadian Payroll Association (CPA) and released today, 59% of Canadian employees report they would have trouble making ends meet if their paycheque was delayed by even one week (emphasis added).
"We were shocked by that number. So many Canadians are now living so close to the line that if they miss a single paycheque, the majority will find themselves in financial difficulty," says Janice MacLellan, Chairman of the CPA.
Financial experts recommend that people keep emergency funds totaling approximately three months of expenses (rent, mortgage, bills, groceries, etc.).
By age group, the younger workforce is feeling the greatest pinch, with 45% of those aged 18-34 saying it would be difficult or very difficult for them to meet their current financial obligations if a paycheque were delayed, and a further 21% stating that it would be somewhat difficult. By household, the situation is most precarious for single parents, with 72% saying they would have some trouble making ends meet if their pay were delayed.
The survey also found that 50% of Canadian workers are unable to save more than 5% of their net pay for retirement. Financial experts generally recommend a retirement savings rate of about 10%.
"Canadians are living paycheque to paycheque, and there's precious little left that they can put away for retirement," notes Patrick Culhane, CPA's President and CEO.
About one-third of Canadian workers say they have been trying to save more money than a year ago because of the economic uncertainty but have been unable to do so. Another 42% say they aren't even attempting to save additional funds. Yet, the majority (52%) feels they'll need between $750,000 and $3 million to live comfortably in retirement.
Those finding it most difficult to put money aside are single parents, with 65% saying they're saving only 5% or less of their net pay.
A majority of Canadians (70%) say their first priority if they were to win $1 million in the lottery would be to pay off their debt, followed by contributing as much as possible toward retirement (35%) and investing (30%) as the next priorities.
Of all regions, Quebecers would be more likely to use some of their lottery winnings to have a party (7%) than people living elsewhere in Canada (3%). Maritimers would be more likely to share their lottery winnings with family members (37%) than would the rest of the country (26%).
Cash is king for Canadians when it comes to remuneration. A whopping 65% of those who responded said it's more important that they receive higher wages from their employer, compared to better health benefits (25%), and education funding (10%).
There was also some optimism in the survey: 66% of respondents believe that the economy in their town or city will improve and most believe they'll receive modest pay increases over the next year.
Over 2,800 employees from across the country participated in the survey. This survey is consistent with a margin of error of 2.3%, 19 times out of 20.
About the CPA:
Payroll professionals in 1.5 million organizations across Canada are responsible for ensuring the timely and accurate payment of $730 billion in wages and taxable benefits, $230 billion in statutory remittances to the federal and provincial governments and $80 billion in health and retirement premiums, while complying with more than 185 legislative requirements. The Canadian Payroll Association (CPA) has influenced the payroll compliance practices and processes of hundreds of thousands of employers since 1978. As the authoritative source of Canadian payroll knowledge, the CPA affects the legislative processes and practices of payroll service and software providers, as well as hundreds of thousands of small, medium and large employers. National Payroll Week (September 14-18) recognizes the accomplishments of payroll professionals and the CPA by building greater awareness of the size and scope of payroll and its impact on employers, employees and government across Canada.
For further information: Rachel Sa, PR POST, (416) 777-0368, firstname.lastname@example.org