A recent survey by RBC Investments’ direct investing service, Action Direct, revealed that almost two-thirds (65%) of Canadian families with children under the age of 17, are missing out on the Canadian Education Savings Grant, a feature of Registered Education Savings Plans.

The RBC Investments survey found that less than one quarter (24%) of all Canadians are aware of RESPs and only 16% of Canadians own RESPs. When asked about awareness of the benefits of investing in RESPs, only half of those who had heard of RESPs knew that they could receive federal grant money every year to help offset the cost of their children’s higher education.

Respondents claimed that the best-known feature of RESPs was tax savings (71%), a benefit that only kicks in later when funds are withdrawn by the beneficiary to attend college or university. Other well-known features of RESPs were tax-sheltered growth (62%) followed by the CESG (50%) and the potential for more than one beneficiary (47%).

“Canadians are simply not taking full advantage of the automatic 20% contribution towards their child’s education they could be receiving from the Canadian government,” said Grant Rasmussen, president and CEO, RBC Action Direct Inc.

As part of an RESP, Canadian residents can receive the Canadian Education Savings Grant, a program from the federal government that provides up to $400 per-year-per-beneficiary.

To qualify for the full 2002 CESG from the federal government, the RESP contribution must be made on or before December 31, 2002.

These findings are from a survey conducted by Thompson Lightstone in September 2002. The survey is based on telephone interviews with 1,000 Canadians, 18 years of age or older. Results based on this sample size are accurate to within (+/-) 3 percentage points, 19 times out of 20.