Ninety-two per cent of Canadian parents see their retirement plans as unstable with cost of post-secondary education among top concerns

Toronto, ON (February 5, 2014) - With RRSP season in full swing, many Canadians have retirement savings on their minds. Although contributing to an RRSP can help you put aside funds for retirement, there are other factors that parents must consider when developing an effective long-term savings strategy.

A recent survey conducted by Leger Marketing and commissioned by C.S.T.  Consultants Inc. (CST), one of Canada’s largest providers of Registered Education Savings Plans (RESPs), shows that 92 per cent of parents with children under the age of 18 consider their retirement plans to be potentially unstable. Nearly one in three (29 per cent) respondents cite the cost of post-secondary education for their children as a top concern, and 28 per cent say they already have or expect to dip into their retirement savings to put their child through university.

“These results make it clear that many Canadians are concerned that having to finance a child’s post-secondary education has the potential to derail their retirement plans,” said Peter Lewis, Vice President of Regulatory and Corporate Affairs at CST. “To plan ahead and feel secure about your future, open an RESP when your child is young and start making regular contributions. While factors such as the cost of living and inflation are beyond our control, contributing to an RESP will put you in a much better position to protect your hard-earned savings later in life.”

Out of the 29 per cent of respondents who say the cost of education has the potential to disrupt their retirement plans, 60 per cent say they plan to invest in an RESP this year. Although this is promising, the findings show that only 25 per cent consider an RESP to be part of their overall retirement savings strategy.

Similarly, people are prioritizing contributing to RRSPs over RESPs, with 61 per cent of survey respondents saying they’re likely to make a contribution into their RRSP this year vs. 55 per cent into their RESP.

“If you’re a parent, it’s important to think of an RESP as a part of your overall retirement savings approach. Investing in an RRSP alone is not enough,” said Lewis. “Opening an RESP is a smart, safe way to proactively save for your child’s education so that when they’re ready to study, you’ll be ready to help pay for it. With a number of different savings grants available, you are eligible to receive up to $7,200 in government funding throughout the life of your plan. It’s really a no-brainer.”

Additional survey findings:

  • Overall, Canadians are savers: those likely to invest in an RESP this year are also likely to contribute to an RRSP (78 per cent)
  • 72 per cent believe it’s important to make an annual RESP contribution
  • Quebecers are significantly less likely than other regions to invest in RESPs with 42 per cent saying ‘not likely at all’

This survey for CST Consultants was conducted between January 17 and January 23, 2014 using Leger Marketing’s online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-3.1%, 19 times out of 20.

Here are some reasons why you should invest in an RESP today:

The cost of education is rising

  • Average university tuition fees increased by 3.3 per cent in 2013,[1] and the average cost for a 4-year university program while living away from home could   be approx. $150,000 by the year 2032.[2] Scholarships and loans may not be enough unless you’ve planned ahead and started saving early. An RESP is the best way to save for post-secondary education.

Post-secondary education is critical to success

  • Numbers don’t lie. More than ever, the job market requires higher learning. Graduates with a Bachelor’s degree will typically earn $1.3 million more over their lifetime compared to high school graduates,[3] and 3 out of 4 new jobs will require a post-secondary education.[4]

You can avoid the burden of debt

  • If you borrow an amount equal to the value of your RESP, your student loan repayments could be more than your RESP contributions. Borrowing doesn’t just cost more in the long run, but it also puts the burden of debt on your child.[5]

Saving early is in your best interest

  • The earlier you start saving for your child’s education, the more your savings can benefit from the power of compounding. If you start investing $210 every month for your new born, their RESP could be worth almost $30,000 more than if you start when your child is five.[6]

Access to government grants

  • The sooner you start an RESP for your child, the sooner you will be rewarded by the Canadian government for planning and thinking ahead. If your child is a Canadian resident under the age of 17, they are eligible for the Canada Education Savings Grant (CESG), which matches 20 per cent of the first $2,500 you contribute to your child’s RESP each year up to a lifetime maximum of $7,200. There are several other grants you can apply for depending on your province of residence and eligibility.

CST encourages parents to learn more about RESPs and start investing in their child’s future. With an RESP, parents, guardians, relatives or friends can contribute up to a lifetime maximum of $50,000 for each child.  There is no annual contribution limit and the federal government will add a 20% matching grant (the Canada Education Savings Grant) - adding up to $500 into your RESP every year. Over the life of a plan, that could total an extra $7,200 set aside for your child’s post-secondary education. To maximize the amount of this grant, parents should invest $2,500 per year into their child’s RESP. 

Quebec residents are entitled to the Quebec Education Savings Incentive (QESI), and can receive an additional 10 per cent to a maximum of $250 in grants per child every year for a lifetime maximum of $3,600. Saskatchewan residents are entitled to an extra 10 per cent of their contributions up to a maximum of $250 in grants per child every year for a lifetime maximum of $4,500 through the Saskatchewan Advantage Grant for Education Savings (SAGES).  Alberta families are also still eligible for the Alberta Centennial Education Savings Grant (ACES), which provides families $500 when they first start an RESP plus another $100 when their child turns 8, 11, and 14 years old.[7]  Families in British Columbia are eligible for a BC Training and Education Savings Grant of $1,200 paid into their child’s RESP when they turn 6 years of age.

Media contact: 

Erin MacFarlane – Communications Coordinator

C.S.T Consultants Inc. 

(416) 445-7377 ext. 247

[email protected]


About CST 

The Canadian Scholarship Trust Foundation is a non-profit organization that has been helping families save for post-secondary education for over fifty years. As a wholly-owned subsidiary of the Foundation, C.S.T. Consultants Inc. (CST) is the distributor and manager of the Canadian Scholarship Trust Plans.

Focused exclusively on growing and protecting its planholders' savings, CST currently manages $3.9 billion in assets for over 280,000 Canadian families. CST boasts a sales force of 575 located across the country. The Canadian Scholarship Trust Foundation offers its own awards for academic achievement and community engagement to those students in their Group Plans who are pursuing graduate studies.

For more information about RESPs at CST, visit www.cst.org, follow us on Twitter at @CSTConsultants and like us on Facebook at facebook.com/CSTConsultants.



[1] Statistics Canada – The Daily – University Tuition Fees 2013/2014, September 2013 

[2] Projected tuition costs of a 4 year university program are based on the annual average cost of tuition across Canada for the previous school year and an assumed average annual increase of 4.1%. Room and board are based on typical costs for residence with an average annual increase of 3%. Projection includes the cost of entertainment, transportation and books adjusted using an annual inflation rate of 2%. Source: Statistics Canada 2012 and university websites.

[3] Association of Universities and Colleges of Canada (AUCC), Back to School Quick Facts, October 2013.

[4] Looking ahead; A 10-Year Outlook for the Canadian Labour Market 2008-2017, Human Resources and Skills Development Canada.

[5] Based on a  15 year repayment schedule in accordance with most student loan plans beginning six months after graduation and interest  calculated using prime (3%)+ 5% totalling 8%.

[6] This example illustrates the effect of compound interest only. It assumes a compound annual return of 5% until age 17. CESG calculated at 20% of contributions. Example excludes fees. Not intended to show future values. Investment returns and actual future values cannot be predicted or guaranteed.

[7] The ACES program is currently under review by the government.