Half Canadian Families Using RESP to Save for College and University

BMO Investments recently released the results of a study to see how Canadians are taking advantage of Registered Education Savings Plans (RESP) for college and university savings.

Their results show that over half (52 per cent) of Canadian parents have opened a RESP for their children. While seventy per cent said they believe it is best to set up an RESP as soon as possible after a child is born.

“The costs associated with a post-secondary education can be daunting, so it’s encouraging to see that a majority of Canadian parents appreciate the importance of planning and saving for post-secondary education,” said Robert Armstrong, Vice President, Managed Solutions and Registered Plans Strategy, BMO Investments Inc.

BMO estimates that for a child born in 2012, the costs of a four-year university degree could reach $140,000, based on a four-year university degree currently costing around $60,000.

“A good RESP savings strategy, for those who are unsure about what to hold in an RESP, is to include investments that have a designated target maturity date,” said Armstrong.

The same study also revealed that sixty per cent of respondents said they believe they cannot afford to contribute to an RESP. Another 93 per cent of surveyed parents are not aware of the range of investments they can hold within an RESP.