Canadians turn to advisors first, but RESP knowledge trails TFSA familiarity
Half of Canadian parents have yet to open a registered education savings plan, even as most Canadians rank post-secondary schooling as central to long-term financial security.
The Cost of Learning Survey, commissioned by the Canadian Scholarship Trust Foundation (CST), found 50 percent of parents surveyed have opened an RESP, while 45 percent, including those with children over 18, wish they had started saving earlier.
Some 84 percent of Canadians said post-secondary education matters for long-term financial security and success and 51 percent of parents reported feeling anxious about their financial picture.
Parents named groceries (60 percent), salaries failing to keep pace with costs (47 percent), and housing (41 percent) as barriers to saving.
Sixty percent of parents described saving for their children's education as a major or moderate challenge, while 70 percent said the same of saving for major purchases and 68 percent of saving for retirement, higher rates than among other Canadians.
Education remains a priority for Canadians, but outside factors are preventing them from reaching their savings goals, said Peter Lewis, president and chief executive officer of CST.
Canadians are worried about affordability in the short term and “unable to invest or save the way they want for the long term,” he said.
More than eight in 10 Canadians said they are familiar with tax-free savings accounts, compared with two-thirds for RESPs and just over half for non-registered investment accounts.
Parents were the most informed group on education saving, though only 17 percent described themselves as very knowledgeable.
Grandparents and prospective parents were less familiar with the savings vehicles available than parents even as 23 percent of parents expect grandparents to contribute to their child's education and 29 percent expect their children to contribute.
More than half of Canadians (52 percent) turn to financial professionals such as planners, advisors, and accountants for financial advice, ahead of family members (30 percent) and friends or peers (22 percent).
Families need better information about the savings vehicles available to them and should discuss education savings with relatives and professionals, Lewis said.
He pointed to government grants and incentives such as the Canada Learning Bond, aimed at modest to low-income families, as entry points for parents.
