A majority of working Canadians are cash-strapped and have little ability to put money away for their retirement, a new survey reveals.

The 2009 National Payroll Week Employee Survey of nearly 3,000 Canadians, conducted by the Canadian Payroll Association, shows that 59% of employees would have trouble making ends meet if their paycheque was delayed by even one week.

“We were shocked by that number. So many Canadians are now living so close to the line that if they miss a single paycheque, the majority will find themselves in financial difficulty,” said Janice MacLellan, chairman of the CPA.

Financial experts recommend that people keep emergency funds that total enough to cover three months of expenses, including rent or mortgage payments, bills, groceries, and other expenses.

By age group, the younger workforce is feeling the greatest pinch, with 45% of those aged 18-34 saying it would be difficult or very difficult for them to meet their current financial obligations if a paycheque were delayed, and a further 21% stating that it would be somewhat difficult.

By household, the situation is most precarious for single parents, with 72% saying they would have some trouble making ends meet if their pay were delayed.

The survey also found that 50% of Canadian workers are unable to save more than 5% of their net pay for retirement. Financial experts generally recommend a retirement savings rate of about 10%.

“Canadians are living paycheque to paycheque, and there’s precious little left that they can put away for retirement,” said Patrick Culhane, CPA’s president and CEO.

About one-third of Canadian workers say they have been trying to save more money than a year ago because of the economic uncertainty but have been unable to do so. Another 42% say they aren’t even attempting to save additional funds. Yet, more than half of respondents feel they’ll need between $750,000 and $3 million to live comfortably in retirement.

Those finding it most difficult to put money aside are single parents, with 65% saying they’re saving only 5% or less of their net pay.

The top financial priority for most Canadians is to pay off debt, with 70% of respondents identifying this as their first move if they were to win $1 million in the lottery. More than one-third would contribute as much as possible toward retirement, and 30% would invest the funds.

Of all regions, Quebecers would be more likely to use some of their lottery winnings to have a party, at 7% of the province’s respondents, compared to 3% of respondents across the rest of the country. Maritimers would be more likely to share their lottery winnings with family members, at 37%, compared to 26% in the rest of the country.

Cash is king for Canadians when it comes to remuneration. A whopping 65% of those who responded said it’s more important that they receive higher wages from their employer, compared to better health benefits, at 25%, and education funding, at 10%.

The survey also revealed some optimism among Canadians. Two-thirds of respondents said they believe that the economy in their town or city will improve and most believe they’ll receive modest pay increases over the next year.

IE