RESPs are well known but not well understood
While a large majority of Canadians – 92% – are aware of Registered Education Savings Plans (RESPs), only 17% say they’re knowledgeable about the contribution limits and benefits they offer, according to a recent study.
The study, which surveyed 1,510 Canadian adults online in August 2021, found that more than 80% of Canadian parents say they don’t understand the benefits of this savings tool. RESPs provide several advantages for Canadians saving for their children’s or grandchildren’s education. The money you contribute and invest grows tax-free within an RESP. Plus the federal government supplements your contributions with the Canadian Education Savings Grant (CESG), which could provide an extra $500 in free money every year if you contribute the maximum. Proceeds from RESPs are not just for university but can be used for a wide variety of qualifying education programs at community colleges, CEGEPs, trade schools and other educational institutions.
Among respondents aware of RESPs, just under half (49%) currently contribute or have contributed to one, with an average total contribution of about $22,800. If you’d like to learn more about this powerful savings tool, please contact us.
Source: Cision. Majority of Canadians are aware of RESPs, but less than half are using them. Majority of Canadians are aware of RESPs, but less than half are using them. Sept. 9, 2021. newswire.ca.