RSI Index 2022: Canadians don’t know much about their retirement system
July 11, 2022
Though comparable to what is observed in other industrialized countries, Canadians’ general financial literacy is fairly low, according to the latest edition of the annual survey by the HEC Montréal Retirement and Savings Institute.
Like every year, older, more-educated and higher-earning individuals do better on all aspects, but their level of knowledge is still low, with scores by sub-group never exceeding 60%.
The best-known topics remain the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), depending on the province of residence, registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs). However, respondents selected “don’t know” for over a third of the 29 questions. For instance, under a quarter of respondents are aware that work is allowed while receiving CPP/QPP benefits, even though this could allow them to boost their retirement income at the same time.
The Index includes an acceptable 61% score on general financial knowledge, but it was pulled downward this year by questions on bonds and indebtedness. On the other hand, the topic of purchasing power exhibited an improvement, with a success rate of 64.1%, although the survey was done before mid-January 2022.
“In addition to questioning the capacity of Canadians to make financial decisions with lasting consequences, the RSI Index 2022 highlights the importance of providing them with information on their retirement system,” emphasizes David Boisclair, Executive Director of the HEC Montréal Retirement and Savings Institute. “It seems that they nonetheless manage to find the information they need at the time in their life when it becomes more important to have it.”
The RSI Index analyzes the responses of about 3,007 Canadians aged 35 to 54 to 29 questions on general financial literacy and on Canada’s retirement programs. For the 4th edition, the results show that the overall index is down again, to 35.7%.