Seven in ten believe that higher costs will result from climate change, and most are not confident in their retirement plans
Climate-change-related natural disasters have intensified Canadians’ focus on how environmental concerns will impact their retirement savings.
Specifically, that climate change will increase their expenses and squeeze their retirement funds; 71% of respondents to a recent survey expect this to be the case.
The research from the Canadian Public Pension Leadership Council (CPPLC) discovered a general feeling of weakened confidence in Canadians’ retirement plans.
Looking at data from its 2022 survey and comparing it with a previous study in 2016, the non-partisan group of senior public sector pension plan leaders also found a 15% drop in confidence in retiring on time compared to 2016.
People feel that they will have to work for an extra six years on average beyond their planned retirement age and are 16% less likely to believe they could retire debt free.
"We checked in with Canadians on their feelings about retirement. We see they are less confident about their finances than they were in 2016," said CPPLC co-chair Derek Dobson. "Many worry they could run out of money during retirement. People have been through the COVID-19 pandemic and cost-of-living increases. The financial stress they are feeling affects workplaces and households throughout Canada."
Almost three in ten poll participants said that financial stress impacts their health and almost a quarter said it affects their career decisions and choice of employers.
Location matters
The poll of more than 2,000 people across Canada revealed variations by location, gender, and access to a workplace pension.
For example, on concerns about living expenses being impacted by climate change, 76% of respondents in BC expressed this compared to 72% in Ontario, 71% in Quebec, 69% in the Prairies, and 65% in Atlantic Canada.
Those in BC are also more likely to say they are concerned about maintaining their cost of living due to factors including unaffordable housing.
Women are 12% more likely than men to be concerned about running out of money during retirement.
Workplace pension
Among respondents without a workplace pension plan, 1 in 5 were confident in being able to retire when they want compared to 1 in 3 of those with a workplace pension.
"In Canada, 60% of people do not have a workplace pension plan. These results highlight a pressing need to expand retirement income coverage in Canada," Dobson said. "We also recommend employers continue to invest in financial literacy programs for employees."
