Income Research Paper Series
Recent trends in families' contributions to three registered savings accounts

1. Introduction

The Registered Pension Plan (RPP), the Registered Retirement Savings Plan (RRSP) and the tax-free savings account (TFSA) constitute the third pillar of the Canadian retirement income system.^Note  Incomes from these sources account for an increasing share of the total income of elderly Canadians. For example, income from private pensions accounted for 12.1% in the total income of Canadians aged 65 years and older in 1976. By 2019, this share increased to 35.0%.^Note  It is therefore important to assess the health of this third pillar of Canada’s retirement income system.

One aspect of the health of the system is the inflow of funds to the system, and the key questions are, how many Canadians participated in these three registered accounts and how much did they contribute to them? Numerous studies attempted to answer these questions. However, because of data limitations, most authors focused on RPPs only, RPPs and RRSPs only, or TFSAs only.^Note  One exception is Mehdi and Roberts (2017) who examined the household contribution rate to one or more of the three registered accounts in 2015. This study extends their work in two directions. In addition to examining the contribution rate, this paper also looks at the contribution amount. Furthermore, it investigates the participation in, and the contribution to, the three registered savings accounts over 12 years (2009 to 2020), when data on all three registered accounts were available.

Mehdi and Roberts (2017) took households as the unit of analysis in their study. This differs from other studies that focused on individual contributors. The study by Morissette and Ostrovsky (2006) was the only other study in which Canadian families’ pension coverage and retirement savings were analyzed. The authors argued that retirement readiness was better assessed by looking at the family total contribution to their retirement savings plans. Following those studies, this current work examines the participation in, and the contribution to, the three registered savings accounts by Canadian families.  

Data from the Longitudinal Administrative Databank (LAD) were employed in this analysis. In the LAD, the census family is the only family unit available; hence, this study examines the participation in, and the contribution to, the RPP, the RRSP and the TFSA by census families during the period from 2009 to 2020.^Note 

2. Participation in tax-free savings accounts rises, while participation in Registered Retirement Savings Plans falls

Chart 1 indicates that most Canadian families contributed to one or more of the three registered savings accounts. In 2009, more than half (52.3%) of Canadian families participated in one or more of the three registered accounts. The share increased every year until 2015, reaching 57.9%. It stayed flat for a few years thereafter, varying between 57.1% and 57.3% before the onset of the COVID-19 pandemic. In 2020, the share reached a record high of 58.1%.

Start of text box

Did you know?

Registered Pension Plans (RPPs) are a form of tax-deferred savings arranged by employers or unions to provide pensions to retired employees. Contributions to RPPs are tax deductible and are frequently matched by the employer, but the pension will be taxed when received.

Registered Retirement Savings Plans (RRSPs) allow individuals or their spouses to make tax-deductible contributions. Contributions are capped at the lesser of a fixed percentage of an individual’s employment income from the previous year or a fixed limit ($27,230 for 2020 in current dollars). Income earned in the account accumulates tax free while withdrawals are taxed. Unused contribution room can be carried forward until age 71 after which the RRSP is closed, and an individual chooses either to pay taxes on the full value of the RRSP holdings or to convert the holdings into a registered retirement income fund.

Tax-free savings accounts (TFSAs) allow residents aged 18 and older to save up to a yearly contribution limit ($6,000 in 2019 to 2022 in current dollars). Contributions are not tax deductible and any income earned on these contributions can accumulate in TFSAs tax free. A TFSA account holder can withdraw money from the account at any time, free of taxes. Money withdrawn from a TFSA in the current year increases the contribution room in the subsequent year by the same amount.

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Behind those changes in the overall participation rate were the sharp increase in the TFSA participation rate and the gradual decline in the RRSP participation rate. The TFSA was introduced in 2009, and the family participation rate in TFSAs increased nearly every year since. In 2009, just over one in five Canadian families (21.0%) contributed to TFSAs. The participation rate rose sharply to 36.0% in 2015 when the contribution limit had a one-time jump (from $5,500 to $10,000, current dollars). The participation rate retreated slightly (to 35.5%) in 2016 but resumed its uptick every year thereafter. By 2020, Canadian families’ participation rate to TFSAs reached a record high of 39.4%, nearly doubling from its 2009 level.

The participation rates in the RRSP and the RPP evolved differently from those in the TFSA. From the late 1990s, Canadian families’ participation rate in RRSPs started to decline. The declining trend persisted until 2019, while participation in RPPs remained flat since the early 2000s.^Note  As a result, the TFSA participation rate surpassed the RPP participation rate as of 2011. By 2013, Canadian families’ participation rate in the TFSA exceeded their participation rates in the RPP and the RRSP.

Despite the declining trend in RRSP participation and the flat trend in RPP participation before 2020, the RRSP participation rate and, to a lesser extent, the RPP participation rate increased in 2020, as did the TFSA participation rate. The RRSP participation rate rose from 28.2% in 2019 to 28.7% in 2020, while the TFSA participation rate increased from 37.5% to 39.4%. The RPP participation rate also ticked up from 25.8% to 26.0%. The simultaneous increases in the participation rates in all three registered accounts were mainly driven by the relatively large increase in family income and the substantial reduction in consumption expenditure in that year. For example, the median after-tax income of Canadian families rose 7.1% in 2020, reflecting a surge of government transfers, while household spending declined 6.8%. Consequently, Canadian households’ net saving rate jumped to 26.5% in the first quarter of 2020 and remained as high as 13.0% and 11.0% in the third and fourth quarters, respectively. Some of those extra savings likely spilled over into one or more of the registered savings accounts.

Data table for Chart 1



Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1 RPPs, RRSPs or TFSAs, RPPs, RRSPs and TFSAs, calculated using participation rate (percent) units of measure (appearing as column headers).

	RPPs, RRSPs or TFSAs	RPPs	RRSPs	TFSAs
	participation rate (percent)
2009	52.3	26.0	31.7	21.9
2012	55.3	26.0	30.5	29.5
2015	57.9	25.8	29.8	36.0
2017	57.4	26.0	29.0	36.4
2019	57.1	25.8	28.2	37.5
2020	58.1	26.0	28.7	39.4
Note: RPP = Registered Pension Plan, RRSP = Registered Retirement Savings Plan and TFSA = tax-free savings account. Source: Statistics Canada, Longitudinal Administrative Databank.

3. The tax-free savings account accounts for an increasing share in total contribution

Total contribution to one or more of the three registered accounts grew substantially since 2009. The average contribution rose 54.4% between 2009 and 2020, from $10,345 to $15,970. Part of the strong growth in average contribution can be attributed to the extra savings in 2020 mentioned earlier.^Note  However, when 2020 was excluded, average family contribution still gained an impressive 39.5% from 2009 to 2019. Hence, the strong increase in family total contribution to one or more of the registered accounts cannot be explained only by the surge of government transfers or the reduction in consumption expenditure.

Instead, the introduction of the TFSA likely altered the savings behaviour of Canadian families. On the one hand, TFSA contributions increased much faster than contributions to the other two registered plans. Table 1 shows that the average RPP contribution rose 27.1% between 2009 and 2020, while the average RRSP contribution grew 21.1%. In sharp contrast, the average TFSA contribution increased 75.0%. As a result, the TFSA contribution accounted for an increasing share of the total contribution. In its inauguration year, the TFSA contribution accounted for 28.2% of the total contribution made by Canadian families to one or more of the three registered accounts. Although it was still far below the share of the RRSP contribution (49.2%), it already exceeded the share of the RPP contribution (22.5%). However, by 2013 the share of the TFSA contribution was 40.5%, surpassing the shares of the RPP (20.5%) and the RRSP (39.0%) contributions, and by 2020, the TFSA contribution (51.8%) accounted for more than half of the total contribution of the three registered accounts.



On the other hand, the growth trajectory of the family contribution to registered accounts appeared to have changed permanently after the introduction of the TFSA. Chart 2 shows the average family contribution to one or two of the registered accounts (RPP or RRSP) for the period between 1986 and 2008 and the average contribution to one or more of the three registered accounts (RPP, RRSP or TFSA) for the period between 2009 and 2020. As illustrated, the slope of the growth trajectory was much steeper in the 2009 to 2020 period than in the 1986 to 2008 period, suggesting that a faster-growing pace in the family contribution to registered accounts began after the inception of the TFSA.^Note 

Data table for Chart 2



Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2 Total contribution to one or more accounts, Average contribution to RPPs or RRSPs, Median contribution to RPPs or RRSPs, Average contribution to RPPs, RRSPs or TFSAs and Median contribution to RPPs, RRSPs or TFSAs, calculated using average contribution (dollars) units of measure (appearing as column headers).

	Total contribution to one or more accounts
	Average contribution to RPPs or RRSPs	Median contribution to RPPs or RRSPs	Average contribution to RPPs, RRSPs or TFSAs	Median contribution to RPPs, RRSPs or TFSAs
	average contribution (dollars)
1986	7,015	4,480	Note ...: not applicable	Note ...: not applicable
1987	7,070	4,485	Note ...: not applicable	Note ...: not applicable
1988	7,155	4,620	Note ...: not applicable	Note ...: not applicable
1989	6,900	4,705	Note ...: not applicable	Note ...: not applicable
1990	6,105	4,510	Note ...: not applicable	Note ...: not applicable
1991	6,820	4,520	Note ...: not applicable	Note ...: not applicable
1992	7,175	4,740	Note ...: not applicable	Note ...: not applicable
1993	7,835	4,865	Note ...: not applicable	Note ...: not applicable
1994	8,220	5,115	Note ...: not applicable	Note ...: not applicable
1995	8,460	5,175	Note ...: not applicable	Note ...: not applicable
1996	9,040	5,470	Note ...: not applicable	Note ...: not applicable
1997	9,020	5,515	Note ...: not applicable	Note ...: not applicable
1998	8,660	5,250	Note ...: not applicable	Note ...: not applicable
1999	8,665	5,305	Note ...: not applicable	Note ...: not applicable
2000	8,665	5,245	Note ...: not applicable	Note ...: not applicable
2001	8,295	5,045	Note ...: not applicable	Note ...: not applicable
2002	8,075	4,915	Note ...: not applicable	Note ...: not applicable
2003	7,990	4,850	Note ...: not applicable	Note ...: not applicable
2004	8,315	5,105	Note ...: not applicable	Note ...: not applicable
2005	8,530	5,170	Note ...: not applicable	Note ...: not applicable
2006	8,845	5,330	Note ...: not applicable	Note ...: not applicable
2007	8,985	5,390	Note ...: not applicable	Note ...: not applicable
2008	8,840	5,325	Note ...: not applicable	Note ...: not applicable
2009	Note ...: not applicable	Note ...: not applicable	10,345	6,000
2010	Note ...: not applicable	Note ...: not applicable	11,010	6,755
2011	Note ...: not applicable	Note ...: not applicable	11,250	6,765
2012	Note ...: not applicable	Note ...: not applicable	11,445	6,730
2013	Note ...: not applicable	Note ...: not applicable	12,215	6,955
2014	Note ...: not applicable	Note ...: not applicable	12,650	7,115
2015	Note ...: not applicable	Note ...: not applicable	14,155	8,305
2016	Note ...: not applicable	Note ...: not applicable	13,395	7,340
2017	Note ...: not applicable	Note ...: not applicable	13,980	7,425
2018	Note ...: not applicable	Note ...: not applicable	14,170	7,510
2019	Note ...: not applicable	Note ...: not applicable	14,430	7,560
2020	Note ...: not applicable	Note ...: not applicable	15,970	8,240
... not applicable Note: RPP = Registered Pension Plan, RRSP = Registered Retirement Savings Plan and TFSA = tax-free savings account. Source: Statistics Canada, Longitudinal Administrative Databank.

A possible explanation for the new growth trajectory is that the TFSA offers different incentives for families in different income classes to save. Higher income families with extra savings may not have sufficient RRSP contribution room. Without the TFSA, these families’ extra savings could generate additional taxable income and potentially place them in a higher income tax bracket. Thus, the TFSA offers a tax-efficient tool to higher income families to park and grow their savings. In contrast, tax liabilities are generally low for families with a low to moderate income; hence, saving in the RRSP is not tax efficient. In addition, future withdrawal from their RRSP account may also reduce their retirement benefits from public pensions. More importantly, saving for a rainy day is essential for these families. Without the TFSA, they would have to park this type of savings in a regular savings or investment account to which interest and other gains may potentially reduce or even disqualify them from certain income-tested government transfers. With the TFSA, these risks would be eliminated, whether it is used as a short-term savings vehicle or a retirement savings tool by families with a low or moderate income. 

Given the declining trend in RRSP participation, it is natural to ask whether, and to what extent, the contribution to the TFSA crowded out RRSP savings. Without observing the contributing behaviour of the same families over time, it is difficult to answer these questions. However, as mentioned earlier, before the inception of the TFSA in 2009, the RRSP participation rate had already been declining for about a decade. The TFSA only became known to the public in 2008 through the federal budget. Thus, other factors must have contributed to the declining RRSP participation rate before 2009, and those factors likely persisted beyond 2009.^Note  The TFSA was, at most, just one of the factors behind the declining trend in RRSP participation.

4. Contributions to registered accounts become more unequal

While the growth pattern in family contributions to the registered accounts tell us an interesting story at the aggregate level, it does not show the differences between groups of contributing families. The following sections explore the disparities of contributions among families, beginning with the inequality of family contributions to the registered accounts.

A comparison between the average and the median family contributions during the last decade shows that the average contributions always exceeded the median contributions in all three registered accounts (Table 2). In the case of the RPP, the average contribution was 1.3 times higher than the median contribution, while the mean contributions in the RRSP and the TFSA were, on average, about 1.5 and 1.6 times higher than their respective medians. This implies that the distributions of the contributions were skewed to the right and that considerable inequality existed in family contributions to these registered accounts.



Likewise, the growth rates of the average RRSP and RPP contributions were much higher than the growth rates of the median contributions. As seen earlier, between 2009 and 2020, the average RPP, RRSP and TFSA contributions increased by 27.1%, 21.1% and 75.0%, respectively. However, the corresponding medians (Table 2) grew by 27.3%, 11.4% and 0.2%. Because the average and the median RPP contributions grew at roughly the same pace, the ratio of the mean to median RPP contributions remained at 1.3 during the last twelve years. In contrast, the ratio of the average to median RRSP contributions went up from 1.4 to 1.7, while the ratio of the average to median TFSA contribution grew from 1.2 to 2.0. These rising gaps between the average and the median suggest that inequalities in the RRSP and the TFSA contributions increased over time.

A simple way to gauge contribution inequality is to compare the share of the contribution made by higher contributing families with the share made by lower contributing families. The top half of Chart 3 contains these comparisons. It shows that in each of the registered accounts, the share of the contribution made by the top 10% of contributing families almost always exceeded the share of the contribution made by the bottom 50% of contributing families, confirming the observation that contribution inequality existed within each registered account.^Note  The bottom half of the chart contains another inequality indicator—the Gini indexes of the adjusted family contributions to the registered accounts.^Note  The Gini index estimates also confirm the existence of inequality in family contributions.

However, the extent of the inequality differed across the three registered accounts. The inequality in RRSP contributions, and especially in more recent years in TFSA contributions, were substantially higher than the inequality in the RPP contributions. The share of the top 10% of contributing families in the RPP contribution exceeded the share of the bottom 50% of contributing families, but not by twice as much. In contrast, the share of the top 10% of RRSP contributing families was more than four times higher than the share of the bottom 50% of RRSP contributing families, and the same can be said about the distribution of the TFSA contribution since 2015. The Gini index estimates also indicate that inequalities in the RRSP contribution and in the TFSA contribution more recently were much higher than the inequality in the RPP contribution.

The contribution to each of the registered accounts also grew more unequal over the last 12 years. The Gini index increased in all three registered accounts. The increase in the RPP contribution was very small (from 0.44 in 2009 to 0.45 in 2020), while the increase in the RRSP contribution was modest (from 0.60 to 0.63). However, the Gini index for the TFSA contribution doubled from 0.31 in 2009 to 0.62 in 2020. The large increase in the Gini index for the TFSA contributions was most likely driven by the substantial increase in the contributions made by higher contributing families. The average contribution varied between $200 and $325 during the last 12 years for the bottom 10% of contributing families. In sharp contrast, the average contribution made by the top 10% of contributing families grew more than fourfold, from $14,370 in 2019 to $58,610 in 2020.

The changes in the contribution shares of the higher- and lower-contributing families further indicate that the pathway in the growth in inequality differed across the different registered accounts. The increase in the inequality of the TFSA contribution was accompanied by a substantial rise in the share of the top 10% of families and a substantial decrease in the share of the bottom 50% of families. In contrast, the share of the top 10% of families in the RPP contribution did not change between 2009 and 2020, while the share of the bottom 50% of contributing families declined, signaling that inequality rose between the bottom- and the upper-middle-contributing families. In the RRSP contribution, the share of the top 10% of contributing families increased by an amount that more than offset the decline in the share of the bottom 50% of contributing families, indicating that the share of upper-middle-contributing families also declined, and thus, inequality increased between the top 10% and the rest of the contributing families.

Data table for Chart 3



Data table for Chart 3
Table summary
This table displays the results of Data table for Chart 3 2009, 2012, 2015, 2017, 2019 and 2020, calculated using contribution share (percent) and gini index units of measure (appearing as column headers).

	2009	2012	2015	2017	2019	2020
	contribution share (percent)
Bottom 50% contributors - RPPs	19.3	19.0	18.3	17.7	18.2	18.0
Top 10% contributors - RPPS	30.2	30.1	30.5	30.6	30.2	30.2
Bottom 50% contributors - RRSPs	10.4	10.2	9.5	9.2	9.1	9.0
Top 10% contributors - RRSPs	44.4	45.1	47.0	48.0	48.0	47.9
Bottom 50% contributors - TFSAs	28.0	15.4	10.1	9.9	9.7	9.9
Top 10% contributors - TFSAs	20.7	34.9	40.1	47.3	48.4	48.1
Bottom 50% contributors - RPPs, RRSPs or TFSAs	15.2	13.4	11.8	11.3	11.3	10.9
Top 10% contributors - RPPs, RRSPs or TFSAs	37.5	38.2	40.4	43.1	43.7	44.4
	gini index
RPPs	0.44204	0.44454	0.45431	0.46048	0.45109	0.45362
RRSPs	0.59932	0.6065	0.62306	0.63157	0.63275	0.63322
TFSAs	0.31434	0.50713	0.57643	0.61757	0.62501	0.62152
RPPs, RRSPs or TFSAs	0.50881	0.53111	0.55876	0.57801	0.58123	0.58723
Note: RPP = Registered Pension Plan, RRSP = Registered Retirement Savings Plan and TFSA = tax-free savings account. Source: Statistics Canada, Longitudinal Administrative Databank.

Because inequality existed and grew in the contribution to each of the three registered accounts, it is natural to see that inequality also existed and grew in the total contribution. As indicated by Chart 3, the share of the top 10% of contributing families who contributed to one or more of the three registered accounts substantially exceeded the share of their counterparts in the bottom 50%. Moreover, the share of the top 10% of families rose, while the share of the bottom 50% of families decreased. As a result, the Gini index of the adjusted contribution increased from 0.51 in 2009 to 0.59 in 2020.

5. Higher-income families are more likely to participate in and contribute more to registered accounts

The previous section examined the contribution gaps in the three registered accounts between higher and lower contributing families. This section examines the contribution gaps according to family total income. Because a family’s savings is the difference between its income and its consumption, families with lower income are likely to consume all or a large portion of their income and save less than families with a higher income. As shown in Chart 4, this relationship also holds in Canadian families’ contributions to their registered savings accounts.

The top half of Chart 4 shows that about 1 in 10 Canadian families in the bottom income decile participated in retirement saving and that the participation rate rose steadily for families in higher income deciles. For families in the top decile, 9 out of 10 participated in retirement saving and their participation rate essentially stayed at the same level over time. In addition, the participation rate varied more among families in the lower deciles of the income distribution. For example, for families in the second income decile, the participation rate varied between 12.3% and 20.7% from 2009 to 2020, while the participation rate varied between 81.2% and 84.1% for families in the eighth decile, suggesting that participation in retirement saving was less certain among lower-income families.

The bottom half of Chart 4 illustrates that families with a higher income contributed more to their registered savings accounts than families with a lower income. In 2020, for example, families in the top decile contributed, on average, $35,650 to their registered savings accounts. This was nearly four times higher than the contributions made by families in the bottom decile ($8,975). Furthermore, although there was generally a positive correlation between savings and income for families in the bottom half of the income distribution, this correlation did not always hold. In 2009, families in the bottom decile contributed $4,160, on average, while families in the fifth decile contributed 19.6% more ($4,975); however, in 2020, the average contribution made by families in the fifth decile ($8,475) was 5.5% lower than the average contribution made by families in the bottom decile ($8,970). In contrast, the positive relationship held each year between 2009 and 2020 for families in the top half of the income distribution, and as families moved from the sixth to the tenth income deciles, the average contribution rose increasingly more: 19.2% from the sixth decile ($9,780) to the seventh decile ($11,655), and 80.7% from the ninth decile ($19,730) to the top decile ($35,650) in 2020.

Data table for Chart 4



Data table for Chart 4
Table summary
This table displays the results of Data table for Chart 4 1st decile, 2nd decile, 3rd decile, 4th decile, 5th decile, 6th decile, 7th decile, 8th decile, 9th decile and 10th decile, calculated using participation rate (percent) and average contribution (dollars) units of measure (appearing as column headers).

	1st decile	2nd decile	3rd decile	4th decile	5th decile	6th decile	7th decile	8th decile	9th decile	10th decile
	participation rate (percent)
2009	8.1	12.3	21.3	36.2	50.3	62.8	73.1	81.2	87.4	90.2
2012	11.1	17.0	26.3	41.3	54.8	66.1	75.5	82.6	87.9	90.1
2015	13.0	20.7	30.8	45.6	58.3	69.2	77.5	84.1	88.9	90.7
2017	12.5	20.6	29.3	44.9	58.0	68.7	77.1	83.6	88.6	90.3
2019	12.1	18.8	29.7	44.8	57.7	68.7	77.0	83.4	88.7	90.6
2020	14.0	20.7	32.1	45.8	58.0	69.0	77.5	84.0	89.3	91.1
	average contribution (dollars)
2009	4,160	3,900	4,385	4,605	4,975	5,740	7,035	9,010	12,525	23,445
2012	5,275	4,945	6,070	5,895	6,115	6,845	8,155	10,305	14,070	25,415
2015	7,280	6,615	8,100	7,910	8,130	8,940	10,480	12,975	17,315	31,040
2017	7,140	6,605	7,770	7,530	7,715	8,620	10,230	12,770	17,335	30,985
2019	7,660	7,350	8,460	7,915	8,085	8,975	10,605	13,140	17,555	31,535
2020	8,975	8,400	8,670	8,440	8,805	9,780	11,655	14,565	19,730	35,655
Source: Statistics Canada, Longitudinal Administrative Databank.

6. Contributions to registered accounts follow the family life cycle

A contribution to a registered account is a form of savings. A leading theory of saving is the life-cycle hypothesis that predicts a hump-shaped relationship between the age of those who save and their propensity to save as well as the amount they save.

With a focus on a family’s contribution to their registered accounts, the age of the family reference person is used to approximate the family life cycle in this study. It was found that Canadian families’ participation in, and their contribution to, registered accounts followed the family life cycle—the share of families contributing in, and their average contribution to the registered accounts showed a hump-shaped pattern with respect to the age of the family reference person (Chart 5).^Note  The top part of the chart contains the share of Canadian families that contributed to one or more of the registered savings accounts, while the bottom half shows the average contributions made by the families. Generally, less than half of the families contributed to their registered accounts when their reference person was younger than 25 years. The share rose rapidly as the age of the reference person approached 30. After that, the share continued to increase, albeit at a slower pace, until it peaked when the reference person reached their early 50s, and then started to decline after the reference person reached the age of 55, the onset of early retirement.

Data table for Chart 5



Data table for Chart 5
Table summary
This table displays the results of Data table for Chart 5. The information is grouped by Age (appearing as row headers), 2009, 2012, 2015, 2017, 2019 and 2020, calculated using participation rate (percent) and average contribution (dollars) units of measure (appearing as column headers).

Age	2009	2012	2015	2017	2019	2020
	participation rate (percent)
18	6.9	8.5	9.6	9.1	8.6	11.9
19	13.6	17.7	19.5	18.0	15.1	19.8
20	17.9	23.4	25.6	23.7	20.5	24.0
21	22.7	28.7	30.9	29.6	25.9	29.6
22	27.7	34.1	36.1	34.4	31.6	35.2
23	33.8	39.3	41.0	40.0	37.2	40.5
24	39.6	44.3	47.3	45.7	42.7	46.4
25	44.4	48.2	51.4	49.9	47.8	51.1
26	47.7	51.6	55.0	54.4	52.4	54.8
27	50.4	54.4	57.3	57.4	55.3	58.2
28	52.9	56.5	59.0	59.1	58.6	60.5
29	55.1	57.6	60.9	60.6	60.3	62.7
30	55.7	58.4	60.9	61.3	60.6	63.4
31	56.6	59.6	62.8	62.3	61.8	64.4
32	58.0	60.3	63.5	63.4	62.8	65.2
33	58.2	61.2	63.6	64.3	63.5	65.5
34	58.4	61.6	64.4	64.8	64.3	66.3
35	59.2	62.5	64.9	65.1	64.8	66.5
36	59.2	62.7	65.8	66.1	65.4	67.0
37	59.5	62.8	65.6	66.5	65.7	67.7
38	59.6	63.1	66.2	67.0	66.7	67.6
39	59.9	63.1	66.4	66.9	66.9	68.6
40	60.4	63.2	66.7	67.5	67.8	68.8
41	60.7	63.6	66.8	67.5	67.6	69.4
42	60.9	63.5	66.8	68.1	68.1	69.2
43	61.6	64.4	67.5	68.3	68.1	69.8
44	62.4	64.4	67.3	68.3	68.7	69.9
45	63.2	64.7	67.7	68.8	69.4	70.3
46	63.9	65.4	68.4	68.6	69.0	71.0
47	64.3	66.2	68.1	68.8	69.7	71.0
48	65.1	66.6	68.5	69.5	69.6	71.3
49	65.7	67.3	69.3	69.5	70.0	71.3
50	66.9	67.5	69.5	69.9	70.2	71.6
51	67.1	68.2	70.3	70.1	70.3	71.8
52	67.5	68.5	70.1	70.2	70.4	71.7
53	67.9	68.9	70.4	70.7	70.7	71.8
54	68.1	68.9	70.5	70.4	70.5	71.6
55	67.7	69.1	70.2	70.4	70.8	71.3
56	66.7	67.7	69.9	69.8	70.0	71.0
57	65.3	67.1	69.2	69.1	69.0	70.4
58	64.1	66.0	68.1	68.2	68.5	69.0
59	62.1	64.7	66.7	67.0	67.7	68.2
60	60.1	63.0	65.6	65.9	66.7	67.0
61	57.7	60.7	63.9	64.0	64.7	65.3
62	55.6	58.4	61.8	61.8	62.9	63.4
63	52.7	56.1	59.7	60.0	60.9	61.6
64	49.3	53.7	57.1	57.5	58.2	59.1
65	47.2	51.6	55.3	55.6	56.5	56.7
66	44.5	48.3	52.3	51.7	52.9	53.6
67	41.2	44.9	49.6	49.2	50.8	50.9
68	39.3	43.2	48.2	47.1	48.6	48.9
69	37.1	42.2	46.3	45.3	46.7	46.8
70	35.1	40.3	44.3	44.0	45.1	45.1
71	34.5	39.3	43.8	42.6	44.2	43.9
72	33.7	38.6	44.0	41.1	43.1	42.5
73	33.4	37.8	42.7	40.8	42.1	41.5
74	33.1	37.0	42.0	40.6	41.3	40.2
75	31.8	36.4	41.3	39.4	40.7	39.9
76	31.5	36.8	40.1	38.8	40.6	39.0
77	31.8	36.8	39.8	38.1	39.8	38.9
78	30.7	35.8	39.2	37.0	39.1	38.1
79	30.3	36.0	39.1	36.7	38.4	37.7
80	30.0	36.0	39.1	35.7	37.8	36.6
81	28.8	35.5	38.4	36.3	37.0	36.0
82	28.4	34.8	38.0	36.1	36.6	34.5
83	27.5	34.3	38.3	35.3	36.4	34.4
84	26.5	33.3	37.5	34.7	36.6	34.0
85	25.5	33.4	36.7	34.7	35.7	33.3
86	24.3	32.2	35.8	34.0	35.0	32.6
87	23.0	31.6	35.4	32.7	34.6	31.9
88	21.4	29.6	34.3	33.0	34.1	31.6
89	19.8	29.6	33.6	31.4	32.9	30.6
90	18.5	27.9	32.1	30.4	32.8	29.7
91	16.3	26.5	30.4	29.1	31.3	29.6
92	14.8	23.9	29.8	28.4	30.0	28.6
93	13.8	22.3	28.4	25.9	28.1	27.1
94	13.0	20.5	26.2	25.9	28.3	26.1
95	10.4	18.2	25.3	24.7	26.4	25.2
96	10.7	18.1	22.6	22.2	25.8	23.5
97	8.8	16.7	21.7	21.9	25.2	23.8
98	7.1	12.9	19.8	18.9	22.3	22.6
99	6.0	11.9	14.1	15.7	18.4	17.7
	average contribution (dollars)
18	2,675	2,720	3,525	3,345	2,920	3,710
19	2,855	3,345	3,960	3,935	3,985	4,665
20	3,145	3,765	4,440	4,370	4,250	5,170
21	3,520	4,245	4,810	4,970	4,800	5,920
22	3,915	4,570	5,410	5,560	5,610	6,545
23	4,560	5,230	6,385	6,235	6,590	7,910
24	5,285	5,990	7,255	7,300	7,805	9,205
25	5,740	6,735	8,300	8,270	8,805	10,505
26	6,330	7,080	8,840	9,015	9,355	11,175
27	6,585	7,650	9,220	9,595	9,820	11,925
28	6,980	7,750	9,645	9,885	10,360	12,435
29	7,295	8,085	9,705	10,380	10,835	12,850
30	7,460	8,045	9,920	10,425	10,920	13,195
31	7,840	8,340	10,085	10,525	11,085	13,375
32	8,000	8,555	10,365	10,890	11,300	13,490
33	8,400	8,845	10,575	11,150	11,555	13,865
34	8,630	9,160	10,675	11,320	11,750	14,040
35	8,900	9,355	11,000	11,460	11,900	14,255
36	9,085	9,600	11,275	11,680	12,220	14,425
37	9,320	9,795	11,510	11,960	12,240	14,695
38	9,500	10,160	11,690	12,065	12,465	14,705
39	9,805	10,380	12,025	12,415	12,605	14,860
40	9,835	10,535	12,315	12,585	12,870	14,955
41	9,960	10,760	12,680	13,005	13,165	15,325
42	10,085	11,040	12,880	13,085	13,480	15,475
43	10,210	11,130	13,005	13,510	13,665	15,730
44	10,420	11,455	13,335	13,620	13,975	15,960
45	10,555	11,535	13,860	14,035	14,365	16,300
46	10,760	11,715	14,000	14,325	14,555	16,700
47	10,990	12,060	14,290	14,760	15,135	17,080
48	11,255	12,315	14,810	14,990	15,405	17,535
49	11,635	12,655	15,090	15,425	15,810	17,745
50	11,935	13,025	15,700	15,875	16,310	18,420
51	12,310	13,320	15,925	16,140	16,565	18,835
52	12,595	13,710	16,510	16,575	17,155	19,255
53	12,995	14,100	16,995	17,190	17,420	19,425
54	13,225	14,345	17,215	17,515	17,880	19,965
55	14,030	15,415	18,355	18,255	18,995	20,760
56	13,970	15,195	18,230	18,160	18,740	20,825
57	13,640	15,110	18,440	18,295	18,785	20,480
58	13,550	15,155	18,400	18,230	18,725	20,605
59	13,495	15,010	18,310	18,100	18,610	20,130
60	13,535	14,895	18,660	18,180	18,670	20,050
61	12,870	14,825	18,365	17,845	18,765	19,670
62	12,540	14,435	17,970	17,710	18,135	19,515
63	12,430	13,990	17,795	17,265	17,895	18,995
64	12,110	13,530	17,685	16,960	17,585	18,450
65	12,065	13,950	17,915	16,960	17,490	18,665
66	11,535	13,515	17,515	16,495	17,325	17,920
67	11,145	13,060	17,330	15,950	16,625	17,360
68	10,675	12,560	16,990	15,460	16,220	16,645
69	10,230	12,185	16,515	15,165	15,760	16,565
70	9,720	11,895	16,405	14,995	15,490	15,985
71	9,500	11,695	16,305	14,600	15,105	15,570
72	8,695	10,705	15,555	13,650	14,210	14,490
73	8,785	10,575	15,320	13,035	13,840	14,000
74	8,550	10,405	15,125	13,220	13,570	13,620
75	8,425	10,325	15,035	12,860	13,760	13,420
76	8,515	10,360	14,930	12,765	13,645	13,500
77	8,400	10,405	14,990	12,910	13,640	13,065
78	8,250	10,270	14,855	12,515	13,285	13,110
79	8,155	10,375	15,155	12,880	13,475	13,190
80	8,105	10,180	15,130	12,720	13,755	13,045
81	7,890	10,265	14,900	12,835	13,665	13,165
82	7,895	10,200	14,995	12,830	13,840	12,975
83	7,740	10,345	15,080	12,590	13,795	12,985
84	7,660	10,000	15,115	12,865	13,540	12,980
85	7,555	10,025	14,980	12,790	13,360	12,745
86	7,505	10,165	14,680	12,680	13,745	12,415
87	7,360	9,955	15,095	12,505	13,705	12,960
88	7,320	9,865	14,600	12,465	13,775	12,300
89	7,190	9,920	14,495	12,160	13,240	12,540
90	7,055	9,610	14,315	12,205	12,880	12,075
91	6,845	9,815	14,365	12,145	13,505	11,865
92	6,970	9,890	14,285	11,850	13,010	11,965
93	6,730	9,320	14,075	12,295	12,545	11,695
94	6,395	9,265	14,485	11,365	12,540	11,815
95	6,575	9,585	13,890	11,390	12,765	11,355
96	6,315	9,690	14,820	11,940	13,085	11,280
97	6,325	9,335	14,055	11,195	12,930	11,390
98	6,445	10,125	14,005	12,065	12,630	11,800
99	6,050	9,730	13,955	11,605	12,545	11,455
Source: Statistics Canada, Longitudinal Administrative Databank.

Similarly, the average contribution started from under $5,000 when the family reference person was young and rose rapidly as the reference person approached the age of 30. The average contribution continued to increase at a slightly slower pace, reaching its peak when the reference person was around 54 years of age and decreasing thereafter. Notice that although the participation rate and the contribution amount declined as the reference person surpassed the age of 55, the average contribution made by contributing families was still unwaveringly strong. Some of the strong contribution was in part from contributions made by family members who were younger and still eligible to contribute to their RPPs and RRSPs. However, the TFSA was a much more important driver of the strong participation and contribution by families whose reference person was surpassing their retirement age because, unlike the RPP and the RRSP, all adults can contribute to their TFSA, irrespective of age.

7. Participation rates and contributions are higher in the four largest provinces

The propensity to contribute to the registered accounts and the contribution amounts differed across the country, largely driven by differences in factors such as population ageing, cost of living, employment and income.^Note  Chart 6 presents the family participation rate in, and the average contribution to, one or more of the registered accounts. To save space, only data from selected years (2014, 2015, 2019 and 2020) are presented in the chart.^Note 

The top half of Chart 6 indicates that the participation rates to RPPs, RRSPs and TFSAs were lower in the Atlantic provinces than those in the other provinces. An older population and a lower income in these provinces were the likely factors behind this trend. Families in the three territories had the highest RPP participation rate, possibly because of a higher proportion of employees working in the public sector whose employers were more likely to offer a pension plan.^Note  However, families in Nunavut were the least likely to participate in RRSPs and TFSAs. As a result, their participation rate to one or more of the registered accounts was lower than that of families in all other jurisdictions.

Families in Quebec, Manitoba and Saskatchewan, where union coverage was relatively high, had higher participation rates in RPPs than families in the other provinces.^Note  In Quebec, the cost of living was generally lower and the provincial income tax rate was higher, families also had relatively high participation rates in RRSPs and TFSAs—their participation rate to one or more of the registered accounts was higher than in all other jurisdictions in 2020. Families in Ontario, Alberta and British Columbia had comparatively lower RPP participation rates, but their participation rates in RRSPs and TFSAs were relatively high; hence, families in those provinces also had higher participation rates in one or more of the registered accounts.

Data table for Chart 6



Data table for Chart 6
Table summary
This table displays the results of Data table for Chart 6 2014, 2015, 2019 and 2020, calculated using participation rate (percent) and average contribution (dollars) units of measure (appearing as column headers).

	2014	2015	2019	2020
	participation rate (percent)
Newfoundland and Labrador	48.4	49.2	47.7	47.7
Prince Edward Island	50.5	50.8	50.3	51.0
Nova Scotia	52.3	52.8	52.2	52.6
New Brunswick	49.1	49.5	49.5	49.2
Quebec	57.3	58.3	60.2	61.4
Ontario	57.8	59.2	57.7	58.8
Manitoba	58.2	59.0	57.3	57.8
Saskatchewan	58.7	59.4	57.0	57.3
Alberta	58.5	59.8	57.7	58.2
British Columbia	55.7	56.6	54.7	56.0
Yukon	58.5	60.9	58.7	59.3
Northwest Territories	59.5	59.0	55.6	57.3
Nunavut	46.1	47.1	46.5	46.7
	average contribution (dollars)
Newfoundland and Labrador	11,370	12,945	13,420	13,095
Prince Edward Island	10,625	11,915	12,685	12,995
Nova Scotia	10,625	11,710	12,040	12,695
New Brunswick	10,520	11,490	11,625	12,250
Quebec	11,660	13,085	14,035	15,515
Ontario	13,160	14,790	15,090	16,910
Manitoba	11,000	12,235	12,260	13,230
Saskatchewan	12,140	13,335	12,640	13,705
Alberta	14,310	15,475	14,615	15,920
British Columbia	13,025	14,885	15,075	16,835
Yukon	12,980	13,835	15,230	16,370
Northwest Territories	13,735	14,990	16,125	17,550
Nunavut	11,615	12,720	13,475	14,525
Source: Statistics Canada, Longitudinal Administrative Databank.

The bottom half of Chart 6 presents the average contribution to one or more of the registered savings accounts in the same years as those in the top half. In Ontario, Quebec, Alberta, British Columbia, Yukon and the Northwest Territories, where families had higher participation rates, the contributing families also tended to contribute more to one or more of the registered accounts than families in other jurisdictions. On the other hand, families in the Atlantic provinces, Manitoba, Saskatchewan and Nunavut had lower average contribution. In all these jurisdictions, the average contribution to TFSAs were lower. Families in the Atlantic provinces, Manitoba and Saskatchewan also had a lower average RPP contribution, while families in Nova Scotia, New Brunswick, Prince Edward Island, Manitoba and Saskatchewan all had a lower average RRSP contribution.

8. Looking ahead

Data on contributions to RPPs, RRSPs and TFSAs in 2021 are not available at the family level yet, but available data on individuals’ contributions to RRSPs and TFSAs suggest that the upward trend in family contributions to one or more of the registered accounts might have continued.

In 2021, a slightly higher share (22.4%, +0.1 percentage points) of tax filers contributed to RRSPs. The median contribution made by the contributors increased 4.6%, from $3,600 to $3,765 (in 2020 constant dollars). Data from the T1 Family File indicated that the number of wage earners and the median wages increased in 2021. The strong increase in wage earners in the public sector, where the RPP contribution rate is comparably high, suggests that the participation rate in RPPs should have increased in 2021. 

Likewise, preliminary data show that three out of five Canadian tax filers (59.8%) contributed to their TFSA in 2021, up from 58.0% in the previous year. The average contribution reached $9,920, an increase of 8.1%. This was not as strong as in 2020 (11.3%), but still much stronger than in most other years since the inception of the TFSA. Because TFSA participation was more prevalent and contributions to TFSAs exceeded those to RPPs and RRSPs, the upward trends in the participation rate in, and the contribution to, one or more of the registered accounts would likely continue in 2021.

9. Summary

RPPs, RRSPs and TFSAs make up the “third pillar” of the retirement income system in Canada, and income from these sources play an increasingly important role to support the well-being of elderly Canadians. This article examines families’ participation in, and their contribution to, those registered accounts for the period from 2009 to 2020.

It was found that the participation rate in one or more of the registered accounts increased and that this growth was driven by rising participation in TFSAs. Participation rates to RRSPs declined, while the participation rate to RPPs remained flat during the period. TFSAs also accounted for an increasing share of the total contribution by Canadian families over time. By 2020, the share of the TFSA contribution reached a record high of 51.8%, exceeding the share of the RPP and the RRSP contributions combined.

However, contributions to the RRSPs and TFSAs, and the total contribution to all accounts, became more unequal over time. Families with a higher income and with members in core working age were more likely to participate in, and generally contributed more to, registered accounts than families with a lower income and younger or older families. Across the country, families in the Atlantic provinces and in Nunavut were less likely to participate in registered accounts and contributed less than families in the four largest provinces.

Further research may focus on examining how the contribution is related to contribution limits and contribution rooms available in RRSPs and TFSAs and the withdrawals made by the same individual from RRSPs and TFSAs over time. Studying the contribution behaviour of the same individuals over time may help to better understand if the contribution to one of the registered savings accounts crowds out the savings for another.

Appendix

Data table for Chart A.1



Data table for Chart A.1
Table summary
This table displays the results of Data table for Chart A.1 Share of families that contributed to RPPs, Share of families that contributed to RRSPs and Share of families that contributed to TFSAs, calculated using participation rate (percent) units of measure (appearing as column headers).

	Share of families that contributed to RPPs	Share of families that contributed to RRSPs	Share of families that contributed to TFSAs
	participation rate (percent)
1986	28.0	25.4	Note ...: not applicable
1987	27.8	24.8	Note ...: not applicable
1988	27.9	27.7	Note ...: not applicable
1989	27.9	29.6	Note ...: not applicable
1990	27.4	28.3	Note ...: not applicable
1991	26.7	30.6	Note ...: not applicable
1992	26.5	31.5	Note ...: not applicable
1993	25.9	32.5	Note ...: not applicable
1994	25.2	33.4	Note ...: not applicable
1995	24.9	34.9	Note ...: not applicable
1996	24.3	36.2	Note ...: not applicable
1997	23.9	36.7	Note ...: not applicable
1998	23.6	36.4	Note ...: not applicable
1999	23.1	36.5	Note ...: not applicable
2000	23.4	36.3	Note ...: not applicable
2001	23.9	36.1	Note ...: not applicable
2002	24.2	35.0	Note ...: not applicable
2003	25.3	34.0	Note ...: not applicable
2004	25.5	33.9	Note ...: not applicable
2005	25.5	33.8	Note ...: not applicable
2006	25.2	33.9	Note ...: not applicable
2007	25.7	33.8	Note ...: not applicable
2008	25.6	32.9	Note ...: not applicable
2009	26.0	31.7	21.9
2010	25.9	31.3	24.7
2011	26.1	30.9	27.8
2012	26.0	30.5	29.5
2013	25.9	30.2	31.8
2014	25.7	29.9	33.7
2015	25.8	29.8	36.0
2016	25.8	29.4	35.5
2017	26.0	29.0	36.4
2018	26.0	28.6	37.2
2019	25.8	28.2	37.5
2020	26.0	28.7	39.4
... not applicable Note: RPP = Registered Pension Plan, RRSP = Registered Retirement Savings Plan and TFSA = tax-free savings account. Source: Statistics Canada, Longitudinal Administrative Databank.

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