I'm watching the UK with interest from afar. It seems a lot of the social safety net has been eroded in recent years, benefits are being withdrawn or frozen and retirement ages have increased (I can see why this is neccesary but doesn't mean I like it). All of this is on top of record low interest rates so peoples savings and investments haven't grown as well as they would have in previous decades. The global financial crisis has cripped many peoples already meagre pension plans, to the point where it's not worth even having one for low income and part time workers, or those who've a career break to have kids like me. I always considered that the UK would be a better place to be a poor (ish) old person as at least healthcare and medication are free and even if s**t happens one generally assumes they'll get enough housing and council tax benefits to keep a roof over their head. But this doesn't seem to be the case anymore and if you fall down stairs and break your hip it seems the govenment can take almost your entire lifetimes savings and investments from you and stick you in a care home, robbing your kids of any inheritance. Not to mention the considerable amount they take off you in capital gains for half the investments you make.
After being out of the UK for a decade, it doesn't really look so rosy from afar.


So please tell me how Canada stacks up by comparison. Do you feel you'll be secure in your old age? How good is the social safety net? Do people die in Canada because they can't afford medical care of medication, like some individuals do here in Australia, even though it is still a million miles better than the situation in the US. Do you risk being completely homeless if you have some terrible luck?

I'm also especially interested in how disadvantaged people who move to Canada in their 40's might be when they reach retirement age, compared to people who were born and raised there.

And are there any advantages to investing in Canada compared to the UK? Rental property in particular. We've dabbled in the UK rental market and with careful choice of tenants we've had no issues at all.

Buying rental property is the second national sport after ice hockey.

Yes, I agree about rental property. Many people in Canada seem to do this. Many people I know who live in the UK also do it.

I think it's very "normal" to worry about what's going to happen in older age whether you immigrated somewhere or not. Immigrants tend to be more concerned about finances generally (someone told me this and I don't have substantiation for it). It's also the case we're more likely to constantly compare systems (as you are doing). The sort of issues you've highlighted in your post are, I bet, very common thoughts for many of us.

One thing that seems important to me is to live where there are people you know (friends and family).



S

As ever, you can't talk about this in terms of Canada. State pensions are administered by the federal government but health, welfare and housing are run by the provinces. I can tell you about BC but this may, or may not, be relevant elsewhere.

Personally? Yes.

Generally inferior to the more generous European countries though I do not know enough about the UK to make a direct comparison. Someone who has lived in Canada all their adult life will be entitled to a minimum pension of about $1,350 a month. That will be effectively tax-free if it is their only income.

Medical care is not really an issue as doctors/specialists and hospital care is free at the point of use. Prescription drugs can be a problem as they are all sold at market price and can be incredibly expensive. You certainly hear stories of people who have to choose between buying medicine and eating or paying rent.

BC has a fair pharmacare program that limits the amount a patient has to pay before the government assumes the cost of their medicine. Someone on the minimum pension income above would have to pay $405 a year towards their prescription drugs.

Temporarily for sure. There are government agencies and charities that place people in subsidized housing but there are waiting lists. There are also long-term homeless but they seem to be people with other issues beside just homelessness. There is a lot of scope for improvement in the social services offered to these people.

The minimum income I mentioned above is a combination of Old Aged Security and Guaranteed Income Supplement. To qualify for the full amount you have to be resident in Canada as an adult for 40 years. You have to have lived in Canada for at least 10 years to qualify for anything (20 years if you retire outside Canada). If you meet the minimum threshold the amount is pro-rated for your years in Canada.

The GIS is intended for the very poor. Most people will have other income in retirement. The second state pension is the Canada Pension Plan. The CPP is a contributions based plan on earned (not investment) income so someone moving to Canada mid-life will not be able to make enough contributions to receive the full amount

It makes sense to invest where you intend to retire. Investing in both countries does mitigate the risk of the economy of one country tanking but you do add in exchange rate risk.

Investing in rental property is quite common. House prices in the Lower Mainland are such that it is hard to get a decent yield. The upside is long-term capital growth unless you are a bubble believer. Choosing the right tenants is key as is being an active landlord.

You cannot escape capital gains tax though there are various things you can do to defer it if the amounts involved are sufficient. I like paying capital gains tax. It means I have become better off for doing, well, not a lot. If we want a social safety net someone has to pay for it.

As in other parts of the world we have voted in right wing governments for many years both provincially and federally that have delivered policies that increase the income gap between the wealthy and the poor. The relative standard of living and income security of the poor has suffered as a result. I don't think living off state pensions in either country is something to aspire to. They will help though.

But not really for Pensioners though.
It still is. It may be that some got stuff they really didn't need - eg some people went self employed for no other reason than to qualify for working tax credits - and some of this has been reversed.

It's not as good as it was, but still not bad. Lots more hoops to jump through as well.


The rules on capital are no more strict than they ever were. In fact one can keep greater assets now than a few years ago and still get means tested benefits.
Not that governments stick people in care homes anyway of course.
Whether old or young, Canada has nothing to compare to the UK's Housing Benefit system.

People unable to afford prescriptions is quite common but the programs across the country vary wildly. Every province has some sort of high drugs cost/low income program. It might be restricted to a percentage of your income or you might have to pay 20% of the drugs cost. That's still a lot if you're diabetic or have arthritis. Your 20% could still be $100-$200 a month.

In a couple of provinces you might only need to pay a few $ per prescription but to qualify for that you have to be skint - no money in the bank for emergency like heating or cooker repair or replacement - and they take into account income of others in the same house.

Seniors generally do better with drugs costs though. As they often do with many things thanks to this weird idea that something suddenly changes on their 65th birthday that renders them helpless and in need.

But again, much depends on their housing situation.

My mother in law has the minimum income for seniors and it's more than we ever had as a family of four when the kids were at school. She lives with us now but even when she was renting a 3 bed apartment she managed comfortably.
Yes.
Unlike the UK you can build up some 'pension' money simply by being resident. On the other hand if one has nothing or not much both UK and Canada will make it up to a minimum.

The UK is better if the pensioner has to pay rent, Canada is likely better if the senior pays no or low rent.

Depending on where you choose to live in Canada you can buy a good quality home and good quality rental property for the price of just a home elsewhere.

My mother in law gets OAS and GIS. Or the Quebec equivalent.
I'm never sure how this works. In the UK it's pretty straightforward with Pension Credit topping up any income to the same basic level. There are a couple of other variations but basically there's a minimum level at which nobody falls below.

Here it may well be that some formula is involved in a GIS calculation and that those qualifying for GIS have total incomes not all of the same level as other GIS recipients.

What I do know is that my MIL gets $800+ twice a month ($1600+) so at least $19000pa and still gets an annual tax refund.

Because she gets GIS and that's officially a low income, this Province provides her with prescriptions cover under the Seniors Drug Program whereby her prescriptions are $9.05 a time. That will pay one, two or three months worth so it makes sense to get three months worth.

The pharmacy - Shoppers Drug Mart - is currently waiving $4 of that for Seniors and others under the low income plans so it's really only $5.05 for three months supply of each prescription.

I believe Shoppers does that in at least Ontario as well as NB.

Try as she might, my mother in law has great difficulty spending all of hers.

yes & only because we had luck all round on our side since being here in Canada & elsewhere, career wise was great, the kids got through University & left home finally with few issues along the way, & our various investments worked out for the better.

No, there isn't 'one fit for all'

poor compared to the UK


That's as wide as broad an open question for the reason Canadian born, raised & lived here all their life could end up in social housing, on the street or be filthy rich - whereas an immigrant that came here in their 40's [Bristol the poster on this thread as an example] may be OK financially at aged 65 because of the location they live in, the smart investing & penny wise living etc etc.

Even the smartest of folks can have career and/or health issues, marital problems & as investors could lose it all.

No different than folks that live in the UK, other than in the UK Pension credit guarantee makes sure no one is on the street, whereas in Canada its possible to be on the street in old age or any age for that matter.

much the same for both countries - win some, lose some

I don't have high faith in 30-35 years that there will be sufficient income for old age. We have no pensions from work, or any sort of retirement savings at this point, and I doubt we could ever save anywhere close to what we would need to retire, so it will be work until 1 of 2 things happen, death or health becomes too severe to work, that is where the worry starts, just can't predict what will happen over the next 30 some odd years.

You can find yourself in a not so good situation if you find yourself with a major medical issue, especially if it keeps you out of work and lack a good amount of savings to fall back on.

Depending on where you live in a province, access to treatment for major illness can require travel, where I live cancer isn't treated locally, patients have to drive about 1 hour each direction for chemo, which can be really hard on the patient, some who can afford it, rent a 2nd temp home closer to the hospital if they need daily treatment.

So one needs to keep in mind what healthcare services is available locally.





Recent article I happened to see today.

‘Cancer never gives you a break’: the financial strain of serious illness | Globalnews.ca

So I'm right in assuming that if you say, moved to Canada as a 45 year old and retired at 65, thn you'd get 50% of the 40 years entitlement and would be guaranteed a minimum income of only about $675 or so per month from a combination of the OAS and GIS.
And if you worked you'd instead get 50% of the maximum CPP amount based on your earnings? And if that was less than $675pcm you'd get that topped up with GIS?

Am I understanding this correctly?

I don't think so. The residency part - 10 years minimum - only applies to OAS with the GIS topping it up.

If your OAS based on residency (but no work) was $675, GIS would top it up. As stated in my post, my MIL gets $800 of each.

A partial CPP may even be topped up by OAS as well as GIS I believe.

There's a calculator tool on Service Canada where you can input the various scenarios and it throws up both OAS and GIS if the CPP is low enough.

just that GIS qualifier disregards OAS income even if its 50% of the going rate & only takes into account other income such as private pensions, investment income, foreign income, which is what I was told by Service Canada, seniors section

Old Age Security - Benefits for Seniors with a Low Income - Service Canada

Guaranteed Income Supplement - Service Canada

What you need to know while receiving the Old Age Security pension - Service Canada

In Ontario

http://www.seniors.gov.on.ca/en/govt...fits/index.php

https://www.ontario.ca/data/guarante...-benefit-rates

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