57 per cent would be in financial difficulty if their pay was delayed by a week
The number of Canadians living paycheque to paycheque has improved slightly from the last two years, according to a survey from the Canadian Payroll Association (CPA).
The survey reports 57 per cent of Canadians said they would be in trouble if they missed one paycheque, a slight improvement from the last two years when 59 per cent said they were living paycheque to paycheque.
It’s the third time the CPA has done the survey, with 2,070 people responding this year.
The percentage of people living without savings in 2011 was higher for younger Canadians aged 18 to 34 at 63 per cent and single parents at 74 per cent.
The regions with the highest percentage of workers living paycheque to paycheque were Ontario at 60 per cent and the Atlantic provinces at 64 per cent.
Failing to save for retirement
Many Canadians are struggling to save for retirement and to make ends meet, according to the survey.
When responding to the survey, 40 per cent of Canadians said they now expect to retire later than they previously planned. The primary reason, cited by 40 per cent of respondents, was "I'm not saving enough money for retirement."
Almost 74 per cent of employees said they have saved less than a quarter of their retirement savings goal.
“This is particularly troubling when you realize that 71 per cent of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54,” said Dianne Winsor, chairman of the CPA.
One-half of employees across the country reported they are saving five per cent or less of their net pay. This is well below the 10 per cent of net pay financial planning experts generally recommend as a retirement savings rate.
While 60 per cent said they are trying to be better savers, more than one-half of these individuals reported they have been unable to do so. The remaining 40 per cent of Canadians said they were not trying to save more.
Respondents on the West coast (55 per cent) and in the Prairie provinces (53 per cent) have been marginally better at saving; whereas single parents (71 per cent) and single individuals (65 per cent) have stated they have not been able to save as much.
Almost two-thirds, or 63 per cent of respondents, felt that they would need more than $750,000. Younger people 18 to 34 are concerned they will need to save more to retire, according to the survey.
Payroll professionals can often help employees administer a savings plan, said Patrick Culhane, CPA president and CEO.
“Develop a savings plan, and then talk to your payroll professional about how you can administer it effectively through payroll,” he said.
