Edward Jones partnered with Leger Research to better understand how Canadians have been impacted financially by the global pandemic. The survey found, while most Canadians have been impacted by COVID-19, the factors affecting them differ based on age or life stage.
Older Canadians, for example, have seen the greatest impact on their retirement savings but are also the most financially prepared and optimistic that they can weather the storm. However, as older Canadians approach retirement, the impact of the pandemic could affect their retirement plans.
Younger Canadians have experienced a more immediate impact. They are less likely to have emergency savings in place, more likely to have experienced a reduction in their salary or a layoff and may be struggling more than others to pay bills, their mortgage or rent. Younger Canadians are less confident in their ability to weather the storm, but the majority do remain optimistic as their prime earning years remain ahead of them.
Emergency savings was a key differentiator amongst Canadians. Those with emergency savings were more likely to be optimistic about their financial present and future, while those without emergency savings are more likely to be struggling to make ends meet.
Please find a full summary of findings below.
The majority of Canadians have seen their retirement savings affected by the pandemic
- More than half (53 per cent) of Canadians have seen their retirement savings affected by COVID-19. Retirement savings have been affected by both market volatility, and other factors (such as layoffs or salary reductions) that are forcing Canadians to dip into their savings.
- Canadians approaching retirement (aged 55+) were most likely to cite their retirement savings have been affected by the pandemic (55 per cent).
- Younger Canadians have also been affected, as 46 per cent of those aged 18-34 responded that their retirement savings have been impacted.
Nearly half of Canadians have seen their salary reduced
- Many Canadians have experienced changes in their employment status, as 42 per cent of Canadians have seen a reduction to their current salary.
- Younger Canadians have been most affected, with 56 per cent of those aged 18-34 citing their salary has been reduced. This could impact their ability to pay for basic needs, as younger Canadians are also the most likely to cite, they are struggling to pay bills, their mortgage or rent (31 per cent and 30 per cent respectively).
Nearly half of Canadians are concerned about paying for their basic needs
- 41 per cent of Canadians are concerned with their ability to pay for their and their family’s basic needs such as groceries, or other supplies.
- Respondents whose retirement has been affected by the pandemic were most likely to be concerned with their ability to pay for their family’s basic needs (50 per cent).
- 64 per cent of those concerned with their ability to pay for their family’s basic needs have applied for the government’s CERB stimulus.
- Respondents aged 45-54 were most likely to be concerned (51 per cent), followed by those aged 18-34 (49 per cent), and 35-44 (47 per cent).
- Older Canadians were more likely to have emergency savings in place and were therefore less likely to be concerned with their ability to provide for themselves and/or their family. Only 29 per cent of respondents aged 55+ responded that they are concerned.
Overwhelming majority of Canadians prepared to weather the storm, despite setbacks
- While many Canadians are worried about their ability to pay for the basic needs of themselves and/or their family, an overwhelming majority (72 per cent) cited that they are financially prepared to weather the storm in the short-term.
- Those aged 18-34 were most likely to be unprepared (37 per cent). This could be attributed to a lack of emergency savings available and salary reductions.
- Those nearing or at retirement age were the most likely to be prepared, as 85 per cent of respondents 55+ noted they are prepared in the short-term.
Most Canadians prepared financially with emergency savings
- While a majority of Canadians have emergency savings in place, one-third (33 per cent) of Canadians do not have emergency savings to support them during the pandemic.
- Those aged 18-34, 35-44, and 45-54 were each most likely to not have emergency savings available (38 per cent, respectively).
- 22 per cent of respondents who do not have emergency savings cited they will need additional funds to get them through the pandemic.
- 47 per cent of those without emergency savings are concerned about their ability to pay for their basic needs, and 67 per cent are not financially prepared to weather the storm.
Confidence in financial professionals is high during the pandemic
- While only 37 per cent of Canadians responded they have partnered with a financial advisor, 86 per cent of those with a financial advisor are confident in the advice their advisor is providing them during the pandemic.
About Edward Jones
Edward Jones is a full-service investment dealer with more than 850 financial advisors in Canadian communities from coast-to-coast. A member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund, the firm is also a participating organization in the Toronto Stock Exchange. For more information, visit edwardjones.ca.