Saving for the kids' college education has taken a hit in 2020

The financial costs of the pandemic continues to impinge on areas most important to Canadian families

Saving for the kids' college education has taken a hit in 2020

The many financial pressures faced by Canadian families in 2020 is likely to impact the next generation as college funds miss out on a year of savings.

For one third of parents, saving for their children’s post-secondary education has been adversely impacted by pandemic-induced tightening of household budgets.

A new poll from Knowledge First Financial to tie in with Education Savings Week shows that 95% of all respondents said saving for their kids’ college education is important but 1 in 4 said education plans have changed as a result of the pandemic.

"COVID-19 is having a serious impact on student learning and Canadian parents' ability to save," said Carrie Russell, President and CEO, Knowledge First Financial. "While we know parents are facing multiple challenges, there is one simple way to help prepare their child for post-secondary education. Investing early, even if it is a small amount, can make a significant impact down the road."

Meanwhile, the financial literacy of post-secondary students is the focus of a new program from National Bank.

Knowledge First Financial is a major provider of Registered Education Savings Plans (RESP) with more than $6.8 billion in assets (Aug. 2020) and is owned by the non-profit Knowledge First Foundation.

Tax benefits of RESPs
RESPs are not only available to parents - grandparents, caregivers and guardians also have the opportunity to open a RESP to save for a student's future. 

The savings plans are eligible for incentives like the Canada Education Savings Grant (CESG) worth up to $7,200 per child. 

Parents can defer taxes of up to $50,000 per child on RESPs and for children who decide not to pursue post-secondary education, the savings can be used towards RRSP's depending on contribution limits.