The annual CROP survey on Quebecers’ saving habits, sponsored by Universitas, revealed a significant interest in RESPs in 2016, with 45% of families with children opting for this type of investment plan. This trend was also observed in the balanced distribution of investment choices of families: 64% saved in a RRSP, 47% in a TFSA and 45% in a RESP.
Federal and provincial grants
“These results are very encouraging; they show more parents are planning ahead for the costs of a post-secondary education. This means more families are taking advantage of RESPs to offer their children a bright future,” said Pierre Lafontaine, Vice-President, Customer Service and Operations of Universitas Financial. He added that the “major advantage of the RESP is the grant money offered by the government…” Federal and provincial grants can boost Quebecers’ RESP savings by at least 30%.
Federal and Quebec government grants attributed to RESPs can increase savings up to a total lifetime limit of $12,800. The interest on invested capital and grants are tax free, and when the time comes, the earnings are paid to the student as educational assistance payments (EAP)
Quebecers’ saving priorities
The survey revealed that most Quebecers are more aware of the importance of investing to finance their futures. Three quarters (75%) of respondents said they put money aside in 2016. Investment goals varied depending on age, and were mainly about retirement (45%), long-term savings (27%), post-secondary education (16%), or for purchasing a home (15%).
Among different types of investments available, the RRSP and the TFSA are still preferred by Quebec investors. The RESP, however, is gaining more and more popularity.