Canadians aren’t saving enough

Fewer Canadians are living pay cheque-to-pay cheque (47% versus 57% last year), finds Canadian Payroll Association (CPA). And in 2012, 66% were able to increase their savings, up from 40%.

Read: Half of Canadians don’t have emergency savings: CIBC

But although more people are saving, the rate of savings remains low. Almost half (46%) are putting away 5% or less of their pay. They should be saving 10% of net pay for retirement, says CPA.

Read: Retirement planning reloaded

Further, 73% have saved less than a quarter of what they’ll need. This means many Canadians are still far from their retirement goals, and 41% say they’ll have to work longer.

The low retirement savings numbers are especially worrisome among older workers, says Patrick Culhane, president and CEO of CPA.

“Many are people who will be leaving the workforce in a few short years, yet most of them remain far below their retirement targets.”

Read: Too many boomers retire with debt

Additional findings include:

• Two out of every five Canadians are spending at, or in excess of, net pay;
• Debt is the main obstacle towards saving;
• Regions with the highest percentage of employees living pay cheque to pay cheque are: Maritimes (54%), Manitoba (53%), and Ontario (52%). Quebec has the lowest percentage (33%);
• Quebec residents lead the way with being able to successfully boost savings (71%).

Read: Help clients become debt-free faster

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.