Many Canadian parents need expert guidance and financial advice to help them make the most of the Registered Education Savings Plans (RESPs), according to a new study conducted for Canada Life.
The survey of 1,510 adults conducted in August for the company by Angus Reid, found that the majority of Canadians – 92 per cent – are aware that RESPs exist, but less than half, only 49 per cent, are currently using the savings tool. Just 17 per cent claim to know about RESP benefits or their contribution limits.
Among those with kids under 18, education savings was rated as a top priority, second only to retirement. Among those without kids, education savings was ranked ninth.
Survey respondents report contributing $22,800 in total, on average to their children’s RESPs, with half contributing monthly (the median monthly contribution is $210), and 29 per cent contributing annually. Survey respondents also say they make use of other methods to save for their children’s education, as well, with 39 per cent opening bank accounts in their child’s name, while another 27 per cent said they were making use of Tax Free Savings Accounts (TFSAs) for this purpose.
“By 2030, the average cost of a four-year, post-secondary degree will be about $111,698 with residence and $55,548 without residence,” the company states, citing research from Knowledge First Financial. “When surveyed by Canada Life, Canadians estimated it would likely cost about $55,070.”