How do pensions and savings work in Canada?

Canada’s public pension comes in two parts: the Canada Pension Plan (CPP, or QPP in Quebec), which you pay into from your wages, and Old Age Security (OAS), which depends on how long you have lived in Canada. On top of that sit workplace pensions and three tax-sheltered accounts: the RRSP, TFSA and FHSA.

CPP and QPP: the pension you pay from your wages

The Canada Pension Plan is the nearest thing to UK National Insurance for pensions. It is deducted from every pay cheque, and your employer pays the same amount again. Unlike National Insurance, it covers only pensions and related benefits, not healthcare. In Quebec the Quebec Pension Plan (QPP), run by Retraite Québec, replaces it.

Nothing more is deducted on earnings above C$85,000. Once you hit the yearly maximum, deductions stop for the rest of the calendar year, so your take-home pay rises towards December. The ceilings rise every January. Check the live figures on the CRA’s CPP rates page each January To see what this does to a salary, use the UK pay vs Canadian pay calculator.

When you can take your CPP pension

The standard age is 65, but you can choose any start date from 60 to 70. The change is permanent:

• Start before 65: your pension is cut by 0.6% for each month early, so 36% less at 60
• Start after 65: it rises by 0.7% for each month you wait, so 42% more at 70
• There is no gain from waiting beyond 70

Old Age Security: based on years lived in Canada

OAS is paid from 65 out of general taxes, not contributions. What you get depends on how long you have lived in Canada after age 18:

• You need at least 10 years of residence after 18 to get any OAS while living in Canada, and 20 years to have it paid abroad
• Each year counts for 1/40 of the full pension, so 40 years gives the full amount
• You can delay it up to 70, for 0.6% more for each month you wait
• The full pension for ages 65 to 74 was reported at about C$762 a month from October 2026, and it is reduced for higher incomes

Unlike most of Canada’s social security agreements, the one with the UK is limited: it only stops people paying into both countries’ schemes during a temporary posting. Service Canada says it cannot help you qualify for benefits, so your UK National Insurance years don’t count towards the OAS or CPP minimums.

Workplace pensions

There is no Canadian equivalent of UK auto-enrolment, so a workplace pension depends on your employer. The common types:

Ask about matching when you weigh an offer: see Is my Canadian job offer a good one? Workplace pension saving reduces your personal RRSP room through a “pension adjustment”.

RRSP, TFSA and FHSA compared

• Unused RRSP room carries forward indefinitely. Over-contributing by more than C$2,000 costs 1% a month on the excess
• TFSA room doesn’t grow in a year you are non-resident for the whole year, and you need a SIN to open one
• You can carry forward up to C$8,000 of unused FHSA room. “First-time buyer” means you haven’t lived in a home you or your spouse owned in the current year or the previous four calendar years
• Your exact RRSP, TFSA and FHSA room is in CRA My Account once you have filed a return: see How much tax will I pay in Canada?

Saving for a deposit? The FHSA can be combined with the RRSP Home Buyers’ Plan for the same home. See Can we buy a home in Canada?

Your UK pensions

The UK State Pension can be paid to you in Canada, but GOV.UK confirms it is frozen there: it doesn’t get the yearly increase, although it goes back up to the current rate if you return to live in the UK. Check how Canada taxes UK pensions and ISAs with a CPA before you move money. See What happens to my UK pension?