2025 predictions: five ways Canadians 55+ will impact all generations

Canadians 55+ are responding to changing cost of living and housing prices by swapping inheritances for shared experiences and timely financial aid for their younger loved ones

TORONTO, Jan. 2, 2025 /CNW/ - This year, older Canadians will throw out the traditional retirement playbook and embrace new financial, technological and familial norms to live more independent and enriching lives. Insights like this from HomeEquity Bank and Ipsos reveal five key predictions for Canadians aged 55+ that will have ripple effects across Gen X, Millennials, Gen Z and even Gen Alpha.

The bank's top five predictions cover financial planning, living legacy and technology adoption trends that will define 2025:

HomeEquity Bank | The most common “living legacy” gifts fund weddings, new property, education, vehicles and travel. (CNW Group/HomeEquity Bank)

1. From leaving a legacy to living one: Older Canadians are realizing their adult children will benefit most from financial help now, instead of years down the line. Over half (53 per cent) of Canadian homeowners aged 55+ say they have gifted a significant amount of money (with 55 per cent of those gifts valued at CAD$25,000 or more) as a financial gift to their adult child or grandchild, with "living legacy" gifts taking the most popular form in education, weddings or a first home. 2024 saw a 16 per cent increase in new reverse mortgage holders reporting using funds for gifting purposes. To support this inter-generational gift-giving trend, HomeEquity Bank is introducing HomeBridge, a new digital solution specifically designed to help Canadian baby boomers leverage their home equity to gift their family – and establish their living legacy.
   
   
2. Skip-gen bonding takes off: A fresh take on living legacy is also on the rise – more Canadians are planning "skip-gen bonding" experiences that see grandparents travel with younger relatives. Younger generations benefit from these adventures through priceless quality time, family connection and new experiences that they would not have otherwise had. The best part? Canadians are finding ways to afford these trips without sacrificing financial security. Since 2021, there has been an 86 per cent increase in new reverse mortgage holders reporting using funds for travel purposes with Gen Z and Gen Alpha grandchildren expected to benefit from the continued trend this year.
   
   
3. Embracing AgeTech at home: With prices predicted to decrease, this year will see wider adoption of AgeTech – a wide range of technologies including wearable devices, smart home systems and even social robots for companionship – that will enable older Canadians to live independently and comfortably, while also providing tools for caregivers to better support their needs. The rise of AgeTech will keep families connected throughout their fitness journey, improve healthcare access and outcomes, and provide peace of mind for younger generations and caregivers who can safely monitor their loved ones while they remain independent.
   
   
4. "House rich" Canadians more comfortable with debt: According to Ipsos, the number of Canadians 55+ who are considered "house rich, cash poor" (HRCP) – defined as less than $50K in investable assets and own a home with at least $400K in equity – has increased by 66 per cent since 2021 to 2.66 million, with more than half (1.47 million) residing in Ontario. And while their limited cash is buying less these days, they're 10 percentage points more comfortable with debt than the rest of Canada. In 2024, half of new reverse mortgage holders report using funds for living expenses. 2025 will see more house rich Canadians explore financial solutions to access their hard-earned savings in their home to fulfill life goals as they age.
   
   
5. Mortgage brokers take centre stage: With a historic 1.2 million mortgages up for renewal in Canada this year, finding an experienced mortgage broker to provide trusted advice and secure the lowest rate possible will be a major priority for Canadians. Brokers will help navigate delinquency risks and recommend solutions that won't exacerbate household debt. Canadians 55+ renewing this year at higher rates may be faced with significantly larger monthly payments on a fixed income. Rather than renew at high rates, brokers will increasingly suggest reverse mortgages as an alternative. They will also be pivotal in helping first-time home buyers take advantage of forced sale opportunities to enter the market.

"Despite financial headwinds, Canadians 55+ are taking an active role in creating stability and purpose in their lives by finding new ways to connect with family, and continuing to pursue independence, dignity and empowerment in 2025," says HomeEquity Bank President and CEO Katherine Dudtschak. "Following a period of extended inflation and increased monthly expenses, we see a desire amongst Canadian homeowners 55+ to explore new ways to access the savings in their homes to achieve their goals."

Visit chip.ca for personal finance tips, resources and insights.

About HomeEquity Bank

HomeEquity Bank is a Schedule 1 Canadian Bank offering a range of reverse mortgage solutions including the flagship CHIP Reverse Mortgage™ product. The company was founded more than 35 years ago to address the financial needs of Canadians who wanted to access the equity of their top asset – their home. The Bank is committed to empowering Canadians aged 55 plus to live the retirement they deserve, in the home they love. HomeEquity Bank is a portfolio company of Ontario Teachers' Pension Plan Board, a global investor that delivers retirement income for 340,000 current and retired teachers in Ontario. For more information, visit www.chip.ca.

SOURCE HomeEquity Bank

HomeEquity Bank, Vivianne Gauci, SVP Customer Experience, [phone], [email protected].; Weber Shandwick for HomeEquity Bank, Adam Bornstein, [phone], [email protected].