With the increase of aging baby boomers, the senior population is predicted to double by 2036 (Healthcare of Ontario Pension Plan, 2017). Studies suggest that this may have implications on a demographic already impacted by poverty. While the low income rate of seniors has been steadily decreasing since the late 1970’s, 12.5% of the senior population are found to be living in poverty (Healthcare of Ontario Pension Plan, 2017). While the low-income rate is decreasing, the income gap between seniors and non-seniors has been steadily growing since the 1990s (Statistics Canada, 2018).
According to the 2014 Financial Capability Survey, one-third of Canadians are not financially prepared for retirement. Uptake of Registered Retirement Savings Plans and Tax Free Savings Accounts are low for lower and middle income earners and found to be steadily decreasing since 2000 (Healthcare of Ontario Pension Plan, 2017).
Two key factors have been found to contribute to senior poverty. The first is a decline of work pension coverage and the second is changing demographics. Retirement plans in the work place are shifting to relying more heavily on personal savings and RRSPs and the decreasing availability of pension plans are significantly affected by changing demographics such as increasing life expectancy and a growing population. This suggests that an increasing about of seniors will not be adequately prepared for retirement. In this way, it is important that policy address the need for better workplace pension coverage.