Edward Jones study: Majority of Canadians have no plans to contribute to their RRSP amid rising inflation

News release | Feb. 14, 2022

Growing number of Canadians cannot afford to contribute to their RRSP

MISSISSAUGA, ON, February 14, 2022 – Edward Jones Canada has released a new study revealing how Canadian investors plan to approach this year’s RRSP season amid rising inflation and the ongoing COVID-19 pandemic. The research found that 33 per cent of Canadians plan to contribute to their RRSP this year, which is on par with last year’s results. The number of Canadians planning to contribute the maximum amount also remained unchanged at 10 per cent.

Rising inflation and the resulting increase in the cost of living and lifestyle costs could be impacting Canadians’ ability to contribute. Of the 52 per cent of those not contributing to their RRSP this year, 55 per cent said they could not afford to, which represents an 11 per cent increase over last year. In total, almost one-third (29 per cent) of Canadians cannot afford to invest their money at all, while one-quarter (25 per cent) consider debt repayment a key financial priority.

The remaining 45 per cent of those not contributing to their RRSP this year are opting for other account types or investment opportunities. Other than RRSP contributions, Canadians are prioritizing TFSA contributions (49 per cent), investing within non-registered investment accounts (17 per cent), and buying real estate (8 per cent).

“The March 1 RRSP deadline is more than a reminder to fund an account, it’s an important opportunity to reflect, reset, recalibrate and refocus your financial priorities and purpose,” said David Gunn, President of Edward Jones Canada. “We are experiencing high inflation, economic volatility, and uncertainty around the pandemic, all of which impact the unique financial situation of Canadian’s. Understanding the value of a comprehensive, long-term financial strategy that considers evolving financial priorities, as well as the environment around us, is the key to staying on course towards your personal and financial goals.”

Canadians aged 18-34 are most likely to contribute to their RRSP (42 per cent) and most likely to contribute the maximum amount (16 per cent). The total percentage of those contributing from this age cohort increased by 7 per cent year-over-year. However, this age group was also 13 per cent more likely to agree that COVID-19 has negatively impacted their ability to save for retirement (57 per cent) and were 8 per cent more likely to have changed their financial priorities as a result of the pandemic (39 per cent).

In total, 44 per cent of Canadians agree the pandemic has negatively impacted their ability to save for retirement, and 31 per cent have changed their financial priorities as a result of the pandemic. Despite this, nearly half (49 per cent) of Canadians noted they manage their finances on their own and do not use a financial advisor.

“Human centered complete wealth management is not just a tagline we use at Edward Jones, it’s a reflection of our commitment to understand each client, and then meeting and exceeding their expectations,” said Gunn. “Canadians want and deserve deeper, more impactful relationships with their financial professional. RRSP season is another opportunity for financial advisors to demonstrate their value by deeply serving their clients and helping them navigate all aspects of their financial strategy, from the impacts of the pandemic and inflation to their changing financial goals and priorities.”   

Of those who do work with a financial advisor, 73 per cent prefer a personal relationship, while only 27 per cent prefer a professional relationship. A personal relationship was defined as one that values a client’s life and circumstances as much as their investments, while a professional relationship did not value a client’s life and circumstances as much as results and returns.

The RRSP deadline is March 1, 2022, and Canadians could be eligible to contribute up to 18% of their previous year's earned income, to a maximum of $27,230, plus unused carried forward room (subject to any pension contribution adjustments). For more information visit edwardjones.ca/retirement.

The data referenced comes from an online survey conducted with 1,514 adult Canadians, 18 years of age of older. Surveys were conducted by Pollara Insights between January 21st to 23rd, 2022. A representative sample of this size would be considered accurate to within ±2.5%, 19 times out of 20.  Results have been weighted using the latest StatsCan data to be representative of the Canada population as a whole.

About Edward Jones Canada

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. Edward Jones is a proud supporter of partners in the health and wellness space such as The Terry Fox Foundation, whose mission supports initiatives positively impacting cancer research. For more information, visit edwardjones.ca.

For more information or to arrange an interview, please contact:

Nathaniel Wallace, Proof Strategies for Edward Jones

[email protected] (416) 969-1668

Tom Horn, Proof Strategies for Edward Jones

[email protected], (416) 566-5055