Some of the surge in household savings that accumulated in response to the pandemic in 2020 flowed through to Canadians’ RRSPs, according to new data from Statistics Canada.
The national statistical agency reported that the number of taxpayers that socked money away in their RRSPs increased in 2020, and the size of their contributions rose too.
In total, taxpayers put $50.1 billion into RRSP accounts in 2020, up by 13.1% from the previous year, with the number of contributors rising 4.9%, StatsCan reported.
The median RRSP contribution in 2020 came in at $3,600, which is the highest level on record, it noted.
The rise in contributions came as household income grew by 6% in 2020, driven by government supports that were deployed to cushion the negative economic effects of the pandemic.
Alongside the increase in total income, savings rose as public health restrictions limited consumer spending.
StatsCan noted that research by the Bank of Canada found that Canadians accumulated $5,800 in extra savings in 2020 on average.
With the added savings on hand, more Canadians put money into RRSPs. The proportion of taxpayers that made RRSP contributions in 2020 increased for the first time in 13 years, StatsCan said, noting that the share of taxpayers making contributions has been declining since the TFSA was launched as a retirement savings alternative.
The reversal of that trend in 2020 was powered by high-income earners, StatsCan said. RRSP participation rates increased for all income categories over the $120,000 mark.
“The increase in contributions may reflect a greater opportunity for higher earners to save more in 2020, as consumption of travel and some services were restricted,” the agency said.