Parents plan to use the Canada Child Benefit to save for post-secondary education
Canadian parents are looking to invest in their children’s futures
TORONTO, ON (July 18, 2016) – Canadian parents are looking ahead and making decisions to safeguard a bright future for their children. According to a recent Ipsos poll, 70% of parents agree that the new Canada Child Benefit (CCB) will help families save and invest in their child’s future needs, specifically post-secondary education. When asked in the poll to identify how much of their CCB they’ll use to pay or save for various activities or expenses, parents said the largest portion of the benefit would go to pay for day-to-day expenses (37% of the total benefit, on average). Savings for post-secondary education followed second at 22%.
The CCB program is rolling out across Canada July 20th. Thousands of Canadian families are eligible for increased benefits. Knowledge First Financial, a leading RESP provider in Canada, commissioned the Ipsos poll to provide insight into what parents plan to do with the extra money.
“The poll results are really encouraging,” says Bruce Sellery, personal finance expert. “As a parent myself, I know first hand how expensive it is to raise kids, and how difficult it can be for parents to set aside money for education. Prioritizing day-to-day expenses, followed by saving for post-secondary education is the smart thing to do.”
According to the poll, three in ten (29%) parents said that the most important reason post-secondary education is worth the investment is because it is a basic requirement in today’s job market. Others believe the most important reason is because it helps to develop practical/job skills (23%), analytical skills (18%) and helps gain life experience and personal growth (16%).
“Post-secondary education is critical. We live in an environment where young people looking for employment without a post-secondary education are at a serious disadvantage,” says George Hopkinson, President & CEO, Knowledge First Financial Inc. “It’s great to see families taking advantage of the Canada Child Benefit program to invest in their children’s post-secondary education. Not only is CCB tax-free money, but families have an opportunity to boost their benefit by contributing to a RESP.”
The best way to save for a child’s post-secondary education is to open or contribute to a RESP, or Registered Education Savings Plan. Opening a RESP allows parents to access federal government grants. Depending on their financial situation and province, other government grants could add even more to their savings. The earlier parents can start saving, the more they can take advantage of both government grants and compounding growth.
Compound growth produces a snowball effect that happens when you put your money in an investment that delivers a return and then your earnings are re-invested. The longer you leave your money, the greater the opportunity for growth. If you contribute to a RESP, your education savings will grow tax-free until the money is withdrawn. You’ll also receive up to $7,200 from the Canada Education Savings Grant plus applicable provincial grants – all to help pay tuition fees and other post-secondary education expenses.
|When Ipsos asked parents to identify how much of the CCB they will use to pay or save for various activities or expenses, they responded:
- 37% for day-to-day expenses
- 22% for post-secondary education
- 16% for childcare
- 14% for extra activities
- 5% for family vacations
- 6% for other purposes
Visit the Government of Canada’s online calculator to determine the CCB your family could receive:
About the Survey: These are some of the findings of an Ipsos poll conducted between June 30 to July 6, 2016, on behalf of Knowledge First Financial. For this survey, a sample of 1,001 Canadians with children in the household from Ipsos' online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ - 3.5 percentage points, 19 times out of 20, had all Canadian parents with children in the household been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.