New report from OSC looks into pandemic’s impact on savings attitudes and behaviours
The Ontario Securities Commission (OSC) has published new research examining how the COVID-19 pandemic impacted Canadian investors last year – and the results are far from uniform.
In an online Ipsos poll of 2,000 Canadian investors, 45% of those who were putting money towards a financial on personal goal – representing roughly 35% of all Canadians surveyed – said they’ve had to stop during COVID-19.
Prior to the pandemic, eight in 10 (79%) Canadian investors said they were contributing to at least one savings goal, a number that rose to as high as 91% among those under 55 years. But during the pandemic, those saving for items such as travel, education, and automobile purchases decided to put it off.
Generally, women were more likely to have stopped putting money toward their goals than men (49% vs. 41%), and a higher proportion of lower-income households said they’ve had to press pause on their financial ambitions (58% of households earning less than $50,000).
On the bright side, Canadian appeared to be more steadfast with respect certain ambitions. Eighty-five per cent of those who were setting aside money for their children’s education before the pandemic said they they’re continuing to save towards that goal in some way. Retirement is another non-negotiable, as 80% of Canadians who were saving for that before COVID-19 hit said that they’re still doing so today.
The report also found that because of job loss, salary reductions, layoffs, and other potentially life-altering changes caused by the pandemic, the majority of investors are looking for ways to improve their financial situation. That includes saving for future emergencies (73%), paying off their debt (73%), and keeping an eye on their overall spending (73%).
Looking at people’s stress levels, the OSC said one third of investors have become more stressed about their investments during the pandemic. That was true for an outsized proportion of pre-retirees between 33 and 54 years old, who made up half of the respondents describing their stress levels as ‘high’ or ‘very high.’
Those who had less than $100,000 invested were reportedly the most stressed, while those with more than $500,000 in investments were the least stressed. The report also found a higher tendency among more highly stressed Canadians to have sold off some investments, while those reporting lower stress levels were more likely to have bought investments.
“This is perhaps a troubling sign of the oft-mentioned uneven recovery,” the report said, noting that those in immediate need of cash end up selling their investments, while those with a greater ability to weather the storm added to their rainy-day funds.
“As the pandemic drags on, these trends risk being magnified, as more investors may find themselves in need of cash to meet immediate, unexpected expenses,” the report said.
