Parents saving more
By Catherine Cullen
An increasing number of Canadian parents are saving their pennies so their children can grow up to be just like you.
Three quarters of Canadian parents with children aged five and under expect their children will attend university, according to a recent survey by Statistics Canada. Parents are also increasingly prepared to finance their children's education, the survey noted.
"We have a very strong indication that parents are strongly committed to a post-secondary education. Half the children aged 18 and under had savings already put aside, up from 41 per cent in 1999," said Lynn Barr-Telford, chief of analysis and dissemination at the Centre for Education and Statistics at StatsCan.
"Education is an important investment. It's not like the olden days when one could save enough in the summer to pay for room and board," said Steve Foerster, professor of finance at the Richard Ivey School of Business. "Education inflation has gone up much faster than overall inflation."
Canadian parents' net education savings for their children up to the age of 18 totals $32 billion, $11 billion of which is invested in government-subsidized registered education savings plans, the survey found.
Foerster said RESPs are an efficient means for parents and other relatives to start saving for the education of children, as any earnings from the investment grows at an interest-free rate.
While more parents are saving across the board, those in the highest income bracket were almost three times more likely to have started saving than those in the lowest income bracket.
"While we say post secondary education is important to getting a job, it is less and less accessible to low-income families," said Dave Ford, VP-education for the University Students' Council.
"It's not just about ensuring that people have enough money, but that enough spots are available," Ford said, adding measures must be taken to ensure education is accessible to everyone, regardless of income.
The survey also noted that as children enter their teens, parents tend to adjust their expectations based on the child's capabilities. While they may no longer expect their child to attend university, 90 per cent of all parents still expect their children to obtain some form of post-secondary education.