Further, citizens require increased health care as they grow older, which will also place pressure on the public purse – fewer resources, more demand (Chart 8). Aging will put pressure on private savings. As the proportion of prime-age savers – age 35 to retirement – declines, this will act as a drag on aggregate savings.
Moreover, at the individual level, as Canadians live longer in retirement, they will need to change their savings behaviour and to plan over a longer horizon. The high levels of household debt in Canada make the need for such adjustment even more crucial (Chart 9). Aging will also put pressure on the redistribution of wealth across generations.