The Daily — Registered retirement savings plan contributions, 2020 (2024)

Released:2022-04-01

In2020, over6.2million Canadians put aside a total of $50.1billion for their retirement by making contributions to their registered retirement savings plan (RRSP). Compared with a year earlier, contributions increased13.1% in2020, while the number of contributors increased4.9%.

In2020, the aggregate total income of Canadians grew by6.0% in constant dollars, because of federal and provincial government transfers and benefits to assist Canadians financially during the COVID-19pandemic. Canadians reported a similar amount of savings in2020as in the previous seven years combined due to higher disposable income and lower consumer spending. According to a report by the Bank of Canada, Canadians had accumulated on average $5,800in extra savings by the end of2020. RRSPs are one of the saving vehicles available to Canadians for investing their savings. Other mechanisms such as tax-free savings accounts or non-registered accounts are also available and may appear more flexible in times of uncertainty.

The proportion of tax filers making RRSP contributions reached22.3% (+0.5percentage points) in2020. The increase in the proportion of tax filers making RRSP contributions in2020broke a12-year downward trend, which started in2008and coincided with the implementation of the tax-free savings account. It is too early to assess whether this uptick in the contribution rate in2020will persist into2021or later years.

Meanwhile, the median RRSP contribution in current dollars has trended up since2008as contribution limits are raised. The median RRSP contribution reached $3,600in2020, the highest level on record and up from $3,260in2019.

The median Registered Retirement Savings Plan contribution increased in all provinces and territories in2020, except in Newfoundland and Labrador

In7of the10provinces and in the three territories, the proportion of tax filers contributing to an RRSP and the total RRSP contributions increased in2020.

Increases in the median RRSP contribution were largest in Nunavut (+26.7%), Québec (+14.0%) and Nova Scotia (+10.0%).

In2019and2020, Quebec has shown the highest contribution rates (26.3% in2020). Since2015, Quebec's contribution rate has been increasing, and the gap has been widening between Quebec and the national rate. Yukon was next highest for the proportion of tax filers making contributions, at24.5% in2020.

Newfoundland and Labrador was the only province where both the median contribution (-8.3%) to an RRSP and the proportion of tax filers making contributions (-0.5percentage points) declined in2020. In2020, there was a much faster decrease in the actual average of hours worked in Newfoundland and Labrador than in other provinces and territories. This loss of hours worked, despite new pandemic benefits, led tax filers in Newfoundland and Labrador to the smallest increase in median total income across the country. In addition, saving rates increased across the country but more slowly in Newfoundland and Labrador in2020. This particular situation might have left tax filers in Newfoundland and Labrador with less money for contributing to an RRSP than in previous years.

In Alberta (+1.7%) and Saskatchewan (+6.6%), the median contribution increased in2020, but the proportion of tax filers making contributions decreased (by -0.2percentage points in each province). The median total income of these two provinces grew less than in the rest of the country, which may have limited possibilities of making RRSP contributions.

Median Registered Retirement Savings Plan contributions in Vancouver, Toronto and Calgary are still the highest among the census metropolitan areas

Similar to2019, Vancouver ($4,700), Toronto ($4,600) and Calgary ($4,200) were the three census metropolitan areas (CMA) with the highest median RRSP contributions in2020.

St. John's was the only CMA in which the median RRSP contribution decreased from2019to2020(-7.5%). It was also the only CMA where the percentage of tax filers to make RRSP contributions declined in the same period (-0.2percentage points). Nevertheless, St. John's median RRSP contribution ($3,700) remained marginally higher than the national median ($3,600) in2020.

On the other hand, Belleville and Winnipeg had the lowest RRSP median contribution amount ($2,600in each case) followed by Lethbridge ($2,610).

Similar to2019, Québec (31.5%), Montréal (27.5%) and Calgary (26.5%) remained the CMAs where contributions to RRSP were more frequent among tax filers in2020. In contrast, tax filers in Abbotsford–Mission (17.4%), Belleville (17.6%) and St. Catharines–Niagara (18.1%) remained least likely to contribute in2020.

Overall increase in proportion of tax filers making Registered Retirement Savings Plan contributions led by those with higher income levels

In2020, the proportion of tax filers who contributed to an RRSP increased in Canada (+0.5percentage points) due to the increased participation of those in income brackets of $120,000or more (+0.2to1.4percentage points) and a shift of many tax filers towards higher income brackets in2020. The increase in contributions may reflect a greater opportunity for higher earners to save more in2020, as consumption of travel and some services were restricted. However the differential across income groups stems in part from the tax incentives built into the RRSP. These incentives are mainly to reduce high income tax rates by contributing in high-income years and withdrawing at a lower tax rate in the future.

Women's Registered Retirement Savings Plan contributions overall remain lower than men's

Female tax filers (20.1%) were less likely overall to make contributions to an RRSP in2020than male tax filers (24.6%).

Women's median RRSP contribution has historically been lower overall than that of men. In2020, the median RRSP contribution was $2,960for women, while the median RRSP contribution was $4,280for men.

However, when considering RRSP behaviour at different levels of income, the picture is more nuanced, as women were more likely to contribute to an RRSP than their male counterparts for each level of income except at the highest of $160,000or more, and the median contributions of women and men were similar in most income groups. Women were more likely to be in the lower income groups (less than $80,000) where the RRSP contribution rates and amounts are lower. This leads to a lower overall contribution rate and median contribution for women.

Products

The document "Technical Reference Guide for the Preliminary Estimates from the T1Family File (T1FF) (11260001) presents information about the methodology, concepts and quality for the data available in this release.

The Income, pensions, spending and wealth portal, which is accessible from the Subjects module of the Statistics Canada website, provides users with a single point of access to a wide variety of information related to income, pensions, spending and wealth.

The data on RRSP contributors (Catalogue number17C0006, various prices) are now available for Canada, the provinces and territories, economic regions, census divisions, census metropolitan areas, census agglomerations, census tracts, and postal-based geographies. These custom services are available upon request. A table associated with this release is available for free on the Statistics Canada website for Canada, provinces and territories, census metropolitan areas, and census agglomerations.

Contact information

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