60% of parents said food prices were a major barrier to saving
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Canadian parents are having a hard time saving for their children’s education as the cost of living and other expenses add up.
More than half reported moderate to major challenges when it comes to education savings, especially while struggling to save for retirement and other major purchases, according to a recent Canadian Scholarship Trust Foundation (CST) report.
Among the major barriers to education savings, 60 per cent cited food prices, 47 per cent said slow salaries and 41 per cent referred to housing costs.
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“These findings reaffirm that education remains a priority for Canadians across the country, but it also shows that outside factors are preventing them from reaching their savings goals,” CST chief executive Peter Lewis said in a news release. “Canadians are not only worried about affordability in the short term, they’re also unable to invest or save the way they want for the long term.”
Canada has several vehicles for education savings, but the best option might be the registered education savings plan (RESP), which allows parents or loved ones of a child to invest up to $50,000 for their education, with the federal government matching 20 per cent of the annual investment up to $500 per year.
Royal Bank of Canada estimates a user contributing $50 per week per child to an RESP would save more than $80,000 per child in 18 years.