Canadians’ annual contributions to their Tax Free Savings Accounts declined in 2016 from the year prior – $4,592 compared $5,531, according to BMO Financial Group’s annual TFSA study released Feb. 23.
The report, by Pollara, also explains that the most common reasons for contributing less include: not having enough money to invest (43 per cent), and needing the cash flow for other expenses (36 per cent).
B.C. residents made the highest contributions
B.C. residents made the highest average contributions for 2016 at $5,898 with Prairies residents contributing the least at $3,220.
The study also indicates that Canadians expect to contribute even less in 2017 at a projected average contribution of $4,325
Ryan ffrench, Director, Term Investments, BMO Bank of Montreal says the study also showed that one-third of Canadians are still unaware of the maximum annual contribution level for TFSAs, which is probably because of the changes made over the years, “so more work can be done to ensure Canadians continue to gain awareness and knowledge as it relates to this important savings vehicle.”
He noted that while it has fluctuated, the maximum contribution level for 2017 remains at $5,500.