New research reveals why fear of the future, not just cost of living, is eroding young Canadians' long-term savings behaviour
Gen Z workers are withdrawing from their retirement savings at a rate far outpacing older generations, and a growing body of Canadian research suggests the cause runs deeper than housing costs or debt - it is fear of the future itself.
New research released by Canada Life in Winnipeg in partnership with Deloitte Canada, finds that existential anxiety is playing an equally significant role as cost-of-living pressures in shaping how young Canadians engage with their workplace savings plans.
The study surveyed approximately 1,900 Canadian respondents (with Gen Z participants making up roughly 40 per cent) and used a randomised controlled experimental design to measure the link between perceptions of existential threat and financial behaviour.
Gen Z employees (born between 1997 and 2012) are withdrawing from their registered retirement savings plans 12 per cent more often than Millennials did at the same age, and 42 per cent more often than Gen X, according to Canada Life's 2024 claims data.
The research firm also found that Gen Zs are twice as likely as the rest of the population to consume dystopian content several times a week, and 140 per cent more likely to discuss the end of humanity with friends and family at the same frequency.
One in eight Gen Z respondents believe humanity will go extinct within their lifetime.
The doomscrolling factor
The study drew a direct line between compulsive consumption of negative content online (a.k.a. doomscrolling) and retirement savings behaviour.
Gen Zs spend an average of 74 minutes per day doomscrolling, roughly 70 per cent more than the rest of the population, or an additional 4.5 hours per week. Each additional hour of doomscrolling per day is associated with a 4.4 per cent lower probability of setting up automatic contributions toward long-term savings, according to the research.
Thinking about the end of the world just once more per month is linked to a four percentage point decrease in the likelihood of holding long-term savings products.
Michelle Hilscher, Senior Manager of Behavioural Economics at Deloitte, noted the cross-generational dimension: "No matter the generation, thinking about the end of the world makes people 16% less likely to own and enrol in long-term savings."
For advisors and financial planners working with younger clients, the findings represent a meaningful shift in how retirement conversations need to be framed. Addressing only the arithmetic of compounding returns or employer matching is no longer sufficient when the client is genuinely uncertain whether the future is worth saving for.
As Wealth Professional has reported in its coverage of young Canadians' retirement planning challenges, economic anxiety and deferred milestones are already reshaping how younger workers approach financial planning and this research adds a psychological layer that many in the industry have yet to account for.
Rethinking the retirement message
The study found that fear-based messaging and dystopian framing largely backfire with Gen Z audiences.
Focus group participants reported finding such messaging manipulative rather than motivating. What resonated instead were messages framed around resilience, agency, and small, concrete steps, not distant retirement projections.
"Asking young employees to plan decades ahead can be difficult when the next 10 years feel uncertain," said Kate Nazar, Senior Vice-President, Workplace Retirement and Savings at Canada Life. "Our research shows that when presented with options that feel relevant to their reality, Gen Z workers can and do want to save."
Julia McGillis, Executive Vice-President, Workplace Benefits and Retirement at Canada Life, framed the challenge in broader industry terms: "We are seizing the opportunity to create retirement and savings solutions that are more relevant, more accessible, and offer more choice."
For financial planners, the practical implication is a shift in positioning. Rather than anchoring retirement planning conversations in a fixed endpoint (retirement at 65, a target nest egg) the research suggests Gen Z responds better to framing savings as a source of flexibility and control in an unpredictable world.
A tax-free savings account (TFSA), for example, may land better with a 24-year-old as a resilience tool than as a retirement vehicle. As advisors weigh the RRSP vs. TFSA question for younger clients, understanding that Gen Z often prioritises accessible, flexible savings over long-term lock-in is essential context.
The research also highlighted a practical design principle: auto-enrolment and default contribution settings remain among the most effective tools for improving Gen Z participation. Canada Life's own data suggests that contribution inertia is common, with employees who begin saving at a 2–4 per cent rate tending to remain at that level. Auto-escalation features can address this without requiring active decision-making from the employee.
Advisors looking to deepen their understanding of how retirement savings behaviour is evolving among Canadian investors will find Canada Life's full research report and employer toolkit available through its workplace retirement and savings platform.
