Just 4 in 10 Canadians are regular savers
More than one-quarter (27 per cent) of men in Canada would consider dipping into their retirement funds to cope with tough times as a result of unforeseen life events, compared to just under one-quarter (23 per cent) of women, according to HSBC's study, The Future of Retirement: A new reality.
The survey of over 15,000 consumers in 15 markets found a significant appetite among savers to dip into retirement savings when faced with financial hardship. However, it also found that just four in 10 (40 per cent) Canadians are regular savers.
Moving to a smaller house was among the alternative coping mechanisms explored by the report. Nearly the same percentages of men (19 per cent) and women (21 per cent) would consider downsizing to deal with financial difficulty.
The study showed the financial strain that home ownership is placing on today's savers, with more than one-quarter (27 per cent) saying that buying a home or paying a mortgage has had a significant impact on their ability to save for retirement. An equal amount (27 per cent) said that becoming unemployed or getting into debt or severe financial hardship would present the same savings challenge.
Bricks and mortar is just one of the sacrifices people would consider making if their financial situation demanded it. One-third (33 per cent) of respondents would tap into other savings and investments and 17 per cent would sell their valuables. However, others would consider borrowing to avoid parting with their assets; 18 per cent would borrow money and 14 per cent would ask friends and family for help.
"Homes can be an emotive investment and people's unwillingness to unlock their equity during times of hardship is understandable. But unless people plan ahead, they may be faced with no alternative,” said Betty Miao, executive vice-president, retail banking and wealth management at HSBC Bank Canada.
"People need to take a more robust approach when it comes to financial planning. Regular saving will put them in a stronger position to cope with the unexpected, and help in maintaining living standards later in life."
