- 52% of Canadians aged 18 to 34 weren't prepared for impact of inflation
- 43% didn't anticipate inflation's effect on ability to pay for basic needs
- 47% willing to pay fees for the opportunity to gain better return on their investments
- 70% are currently investing
TORONTO, Feb. 23, 2023 /CNW/ - Canadians aged 18 to 34 are now much less confident about their financial future, as they try to cope with the ongoing impacts of inflation on their day-to-day lives, according to the annual RBC Financial Independence Poll.
Confidence levels for these young adults plunged to 18% from 31% last year, with a majority voicing concerns about their cash flow (77%). Underlining their cash flow anxiety: income that is too low (46%); fixed expenses that are too high (35%); and unexpected expenses (27%).
In addition, 52% reported they were not prepared for the impact they are now experiencing due to inflation and rising costs. Their top reasons for being unprepared:
- 47%: "I just never experienced high inflation before."
- 43%: "I didn't anticipate how it would affect my ability to pay for basic needs."
- 34%: "I was already living paycheque to paycheque."
- 32%: "I didn't anticipate how it would affect my ability to save/invest for the future."
One action taken by young Canadian adults: they are now paying closer attention to their finances. This includes: day-to-day living expenses (jumped to 62% versus 48% a year ago); managing debt (rose to 34% versus 27%); and the value of their investments (moved up to 25% versus 20%). And they are looking to investments to help them rebuild their savings and reclaim their financial future.
Almost one-third (30%) cited building their investment portfolios as a key financial priority, and whenever they can do so, the majority (62%) of these respondents are setting aside money to contribute to those portfolios. Also, almost half (47%) indicated they were willing to pay fees for the opportunity to gain a better return on their investments.
"Even in the midst of coping with the impact of inflation today, it's good to see young adults are also continuing to focus on how they can invest for their financial future and what's the best approach for the money they're able to invest," said Stuart Gray, Director, Financial Planning Centre of Expertise, RBC. "This is the age group that has the biggest opportunity to see their investments grow over the long term which makes the performance of their investments all the more important."
Gray added. "We're here to share our expertise and advice to help Canadians explore all the investing options available to them and find opportunities to grow their savings."
Top investing goals include providing a safety net and building wealth
The RBC poll found that, while retirement is already on the minds of young adult investors, they are more interested in achieving a comfortable retirement (41%) than an early one (21%). Among their other top investment goals: building a safety net (45%); building wealth (44%); and achieving financial independence (41%). Some significant barriers to reaching these goals: close to half (44%) admit they have little to no knowledge about investments; 54% have no financial plan; and 77% have not connected with a financial advisor within the past year.
"Trying to figure things out on your own, without building investment knowledge or leaning in to the expertise of a financial advisor, doesn't set you up for success," Gray explained. "Working with an advisor, you can get a personalized plan in place that will keep you focused, regardless of what inflation, interest rates and the markets are doing."
Gray also cautioned against looking for quick wins when investing. "We know it can be tempting for investors – especially those new to investing – to chase quick opportunities that may involve high risk and could set them back from achieving their long-term goals. A financial advisor brings a more objective lens to your financial picture and can help keep you focused on what matters most."
Financial advice can range from simply helping Canadians set their financial goals and create a budget, to in-depth conversations about more complex needs. For investing, RBC offers a full spectrum of options, from fully advisor-supported, to automated online portfolios with access to advice, to do-it-yourself online investing – and provides the expertise, personalized advice and powerful tools that are helping Canadians get results. For more information about how to plan your financial future, please visit rbcfinancialplanning.com/what-is-financial-planning.html.
Fast Facts
RBC 2023 FINANCIAL INDEPENDENCE POLL Age Group & Gender Comparisons |
RESPONSES | ALL | 18-
34 | 35-
54 | 55+ | Men | Women |
Confident about financial future | 10 % | 18 % | 9 % | 6 % | 11 % | 10 % |
Concerned about my cash flow | 67 % | 77 % | 69 % | 57 % | 62 % | 71 % |
Can't save more because: |
|
…my income is too low | 38 % | 46 % | 36 % | 35 % | 35 % | 41 % |
…my fixed expenses are too high | 31 % | 35 % | 36 % | 24 % | 27 % | 34 % |
…unexpected expenses | 25 % | 27 % | 28 % | 22 % | 22 % | 28 % |
Not prepared for impact of inflation | 44 % | 52 % | 52 % | 33 % | 38 % | 50 % |
Unprepared because: |
|
|
|
|
|
|
…never experienced high inflation | 32 % | 47 % | 28 % | 21 % | 26 % | 36 % |
…didn't expect impact on ability to pay for basic needs | 39 % | 43 % | 39 % | 34 % | 38 % | 39 % |
…already living paycheque to paycheque | 42 % | 34 % | 49 % | 44 % | 39 % | 45 % |
…didn't anticipate impact on ability to save/invest for the future | 26 % | 32 % | 23 % | 22 % | 25 % | 26 % |
Paying more attention to: |
|
…my day-to-day living expenses | 54 % | 62 % | 55 % | 49 % | 48 % | 61 % |
…managing my debt | 32 % | 34 % | 42 % | 23 % | 31 % | 33 % |
…the value of my investments | 27 % | 25 % | 18 % | 35 % | 30 % | 23 % |
Willing to pay fees for better return on investments | 41 % | 47 % | 40 % | 39 % | 47 % | 36 % |
Most important investing goals: |
|
|
|
|
|
|
…retire comfortably | 51 % | 41 % | 55 % | 54 % | 52 % | 50 % |
…build a safety net | 46 % | 45 % | 43 % | 49 % | 44 % | 48 % |
…achieve financial independence | 34 % | 41 % | 31 % | 33 % | 35 % | 34 % |
…build wealth | 33 % | 44 % | 29 % | 29 % | 39 % | 27 % |
…provide family protection | 29 % | 35 % | 31 % | 24 % | 28 % | 30 % |
…retire early | 19 % | 21 % | 28 % | 10 % | 20 % | 18 % |
Not knowledgeable about investing | 48 % | 44 % | 53 % | 46 % | 37 % | 58 % |
Don't have a financial plan | 54 % | 54 % | 61 % | 50 % | 53 % | 55 % |
Haven't connected with financial advisor within past year | 71 % | 77 % | 76 % | 63 % | 72 % | 71 % |
Have a TFSA | 58 % | 51 % | 53 % | 68 % | 60 % | 57 % |
Have an RRSP | 46 % | 38 % | 54 % | 46 % | 49 % | 48 % |
Prefer TFSA to RRSP | 56 % | 50 % | 47 % | 67 % | 56 % | 56 % |
RBC 2023 FINANCIAL INDEPENDENCE POLL National & Regional Comparisons |
RESPONSES | CAN | BC | AB | SK/
MB | ON | QC | AC |
Confident about financial future | 10 % | 8 % | 11 % | 7 % | 12 % | 9 % | 9 % |
Concerned about my cash flow | 67 % | 63 % | 72 % | 73 % | 70 % | 58 % | 69 % |
Can't save more because: |
|
…my income is too low | 38 % | 36 % | 38 % | 46 % | 39 % | 35 % | 41 % |
…my fixed expenses are too high | 31 % | 34 % | 38 % | 40 % | 31 % | 22 % | 28 % |
…unexpected expenses | 25 % | 26 % | 29 % | 36 % | 23 % | 21 % | 30 % |
Not prepared for impact of inflation | 44 % | 45 % | 48 % | 41 % | 44 % | 44 % | 41 % |
Paying more attention to: |
|
…my day-to-day living expenses | 54 % | 55 % | 66 % | 60 % | 55 % | 43 % | 60 % |
…managing my debt | 32 % | 27 % | 36 % | 43 % | 33 % | 27 % | 38 % |
…the value of my investments | 27 % | 33 % | 25 % | 24 % | 27 % | 26 % | 19 % |
Willing to pay fees for better return on investments | 41 % | 43 % | 42 % | 49 % | 42 % | 36 % | 45 % |
Most important investing goals: |
|
…retire comfortably | 51 % | 49 % | 50 % | 57 % | 52 % | 47 % | 53 % |
…build a safety net | 46 % | 49 % | 46 % | 48 % | 43 % | 50 % | 45 % |
…achieve financial independence | 34 % | 37 % | 37 % | 36 % | 32 % | 35 % | 31 % |
…build wealth | 33 % | 46 % | 37 % | 31 % | 37 % | 18 % | 31 % |
…provide family protection | 29 % | 30 % | 33 % | 32 % | 31 % | 25 % | 22 % |
…retire early | 19 % | 16 % | 18 % | 21 % | 20 % | 19 % | 20 % |
Not knowledgeable about investing | 48 % | 43 % | 42 % | 48 % | 43 % | 61 % | 49 % |
Don't have a financial plan | 54 % | 49 % | 48 % | 47 % | 55 % | 60 % | 57 % |
Haven't connected with financial advisor within past year | 71 % | 65 % | 66 % | 60 % | 73 % | 75 % | 77 % |
Have a TFSA | 58 % | 69 % | 67 % | 61 % | 56 % | 56 % | 43 % |
Have an RRSP | 46 % | 53 % | 45 % | 48 % | 45 % | 44 % | 49 % |
Prefer TFSA to RRSP | 56 % | 60 % | 58 % | 54 % | 54 % | 61 % | 43 % |
About the RBC 2023 Financial Independence Poll
A total of 2,005 surveys were completed online by Ipsos among Canadians aged 18+ from October 15 to 27, 2022 using the Ipsos I-Say Panel for this poll, which has been conducted on behalf of RBC for over three decades. Quota sampling and weighting was employed in order to balance demographics and ensure that the sample's composition reflects that of the actual population of Canadians, according to Census data. The precision of online polls is measured using credibility interval. In this case, the results are accurate to within ± 2.5% percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been surveyed. Credibility intervals will be wider for smaller subsets of the population. Where appropriate, attitudes and opinions are tracked back to previous years' polls.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 95,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.
We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.
About RBC and our unique MyAdvisor personalized planning support
MyAdvisor – a digital advice platform only available at RBC – has now connected 3.4 million Canadians to their personalized plan and the ability to adjust those plans in real time. Complementing RBC's extensive Financial Advice and Planning services, MyAdvisor offers a hybrid approach, so you don't have to choose between digital or human – you get both. Along with 24/7 digital access to your plan, cash flow, net worth and goals, you receive insights, real-time visuals and forecasts to help stay on top of your money and reach your goals. MyAdvisor also connects you to an RBC advisor in your community, via live video, phone or in-person within a branch. Through interactive scenario planning, you can see the potential future impact of today's money decisions on tomorrow's outcome. Whether you're planning for retirement, saving for your first home, or somewhere in between, we can help. For more information, please check out MyAdvisor.
SOURCE RBC Royal Bank