Despite our conservative reputation, a survey released this week suggests that there’s a high number of people in the city with an empty savings account – twice the national average.
The survey was commissioned by EQ Bank and found that 10 per cent of the city has no savings. The national average for savings that low is five per cent.
“People in Ottawa seem slightly less inclined to be good savers, which struck me as slightly strange,” said president Andrew Moor. “I would have thought of Ottawa as a more conservative saving type of community.”
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“It’s a town with a lot of professional people. What that does tell you is it’s not necessarily a walk of life type of thing, it’s probably right across society,” he said.
One explanation for our lack of savings, according to CPA and personal finance expert David Trahair, is that many people in Ottawa have generous pension plans that remove the urgency.
“If they’ve got a guaranteed payment for life defined benefit pension plan, than who needs savings?” said Trahair. “If they have a pension it’s not a big deal for them. It’s everybody else, that doesn’t have a defined benefit pension plan, that need to have savings.”
Trahair said lots of Canadians have trouble putting away money, especially in expensive cities like Ottawa.
“The reason for that is because it’s just expensive to live,” he said. “Most people graduate from school, many have student loan debt, then they get married and have kids, buy a house. It’s expensive to do that.”
The survey was conducted by Environics Research Group, polling 1000 Canadians in Calgary, Edmonton, Vancouver, Halifax, Winnipeg, Ottawa and Toronto on their savings habits.
In Ottawa 150 people were surveyed, giving the local results a margin of error of around 9 per cent.
A second focus of the survey was relationships, and how people compare their habits to their partners. It turns out most people – two-thirds in Ottawa – believe they are the saver in their relationship, preferring to characterize their spouses as the spender.
The ideal arrangement, according to Trahair, is “healthy tension” or having one spender and one saver in a relationship. That way couples can enjoy their earnings while being able to put the brakes on overspending.