A national survey conducted for Chartered Professional Accountants of Canada (CPA Canada) found that almost half of the participating parents have not yet opened a Registered Education Savings Plan (RESP).
“Parents with financial flexibility should be looking to utilize the saving incentive as soon as possible,” stressed Cairine Wilson, vice president, corporate citizenship, CPA Canada. “The RESP program is structured to help grow education savings with the assistance of a government grant tied to your contributions. The greater the window of opportunity for saving the more money that can be accumulated.”
According to the survey, 53% of the participating parents have an RESP. The program can be used to finance education at a college or university in Canada or abroad. It can also be used for skill development at educational institutions in Canada certified by the Minister of Employment and Social Development Canada.
“A lack of awareness, budget challenges or work schedules could all be factors why a significant number of parents are not taking advantage of the RESP program,” explained Wilson. “It is never too late for parents to take the time to learn what options are available and then take action.”
Eight in 10 of the parents surveyed have started saving for a child’s post-secondary education. “More than just tuition must be considered,” said David Trahair, a chartered professional accountant and financial author. “Costs for transportation, shelter, books and food also come into play.”
Three quarters (75%) of the respondents actively saving believe they are on the right track to have enough money to cover the education costs. While this is down significantly from 2010 when 86% felt they were on track, it is basically unchanged from 2012 (74%).
The survey found that 86% of the respondents with children expressed confidence in having the financial knowledge and skills required to adequately perform the task of saving for a child’s post-secondary education.
The CPA Canada 2014 Canadian Finance Study Report was conducted by Nielsen via telephone from Oct. 14-30, 2014. Of the 1,002 respondents answering the survey nationally, 301 of these respondents indicated having children under the age of 18. Answers to these questions asked of paretns are considered accurate to within plus or minus 5.7%, 19 times out of 20.