But more than a quarter have used investments and savings to cover day-
to-day living expenses
TORONTO, Jan. 17 /CNW/ - Nearly 80 per cent of Canadians who have
savings/investments feel that it is either very or fairly important to make
regular contributions to their investments, according to a study conducted by
TNS Canadian Facts for Scotiabank. Residents of Alberta and Quebec, at
83 per cent and 82 per cent respectively, top the national average in saying
regular contributions are important.
The study also revealed that 76 per cent of Canadian investors 18 years
of age and older make at least annual contributions to their investments -
both within and outside an RSP - with 41 per cent opting to make contributions
on a monthly basis. Among the provinces, residents of Alberta (50 per cent),
Manitoba/Saskatchewan (50 per cent) and Ontario (46 per cent) lead the country
in making monthly contributions. Residents of Quebec, at 23 per cent, tend to
favour weekly contributions - almost double the national average of
12 per cent.
"It is encouraging to see that Canadians do put an emphasis on investing
and that making regular contributions is a priority for them," said John
Kellett, Senior Advisor, Mutual Funds Business Development, Scotiabank.
"Starting early and making regular contributions allows investors to earn more
interest and realize greater returns on their money so that, in the long term,
they don't need to save as much to reach their investment goals."
Comparing RSP and other investment contributions:
The last time they contributed to their RSP, Canadian investors made an
average contribution of $2,035. Ontario residents led the nation, contributing
$2,602 while residents of Manitoba and Saskatchewan contributed the least
However, the study indicates that most Canadians contribute more to their
savings/investments than their RSPs. The last time they contributed, Canadian
investors allocated an average of $648 more to non-RSP investments. This
investing pattern is most pronounced in British Columbia, where residents made
an average contribution to their savings/investments of $5,054 compared to an
average of $1,596 to their RSP. People in Manitoba and Saskatchewan also
contributed significantly more to their savings/investments ($2,146) than
their RSPs ($557). Albertans and Atlantic Canadians stand alone in
contributing more to their RSPs ($1,597 and $1,749 respectively) than other
savings/investments ($1,335 and $1,556 respectively).
"It's good to see that Canadians aren't putting all of their eggs in one
basket. An RSP is intended as a fund for retirement, however people also need
to take into account their present needs and future goals and save
accordingly," said Mr. Kellett. "Contributions earmarked for retirement should
be considered a priority, based on an individual's retirement goals and how
much money they will need to realize them. While there are clear tax
advantages to an RSP, I encourage Canadians to consider their contributions
relative to their goals, rather than simply funnelling some money into an RSP
to increase their current after-tax income."
Investment goals and withdrawals:
Retirement is by far the most common reason why Canadian investors are
currently saving or investing, identified by 68 per cent of those surveyed.
That figure jumps to 75 per cent in Alberta and 73 per cent in Atlantic
Other reasons why Canadians are saving/investing include:
- To build an emergency fund - 38 per cent;
- For travel/vacation - 37 per cent;
- To pay off their mortgage or other debts - 23 per cent;
- Home renovations - 23 per cent; and
- Day-to-day living expenses - 20 per cent.
Almost half (46 per cent) of Canadian investors concede that they have
taken money out of their savings/investments to pay for something other than
what they are actually saving for. Of those, 26 per cent admit that they have
taken money out of their savings/investments to cover day-to-day living
expenses, withdrawing an average of $12,500. Residents of
Manitoba/Saskatchewan (33 per cent), Atlantic Canada (31 per cent) and Ontario
(30 per cent) were most likely to have done so.
"It is not uncommon to withdraw money from savings or investments for
major life events such as buying a new home, marriage or a new child.
Withdrawing money for day-to-day living expenses, however, especially from a
tax-sheltered RSP, should be a trigger that a person is living above their
means and should re-evaluate their budget and their spending habits. A
financial advisor can assist in this process and help people set up a plan
that encompasses their day-to-day needs and their future goals, including
retirement," said Mr. Kellett.
Impact of market volatility and the high Canadian dollar on investors'
Market volatility and instability is most likely to be identified as a
concern about investing in today's markets, cited by of 35 per cent of
Canadian investors. Residents of Alberta, at 39 per cent, and Ontario, at
38 per cent, cite this as their primary concern.
Nationally, Quebec investors are most likely to be conservative.
Forty-nine per cent indicate they are not comfortable with taking risks and
are willing to take a lower return to have more security in their investments
(compared to the national average of 37 per cent).
Turning to the impact of the high Canadian dollar, 57 per cent of
Canadian investors say that it has had no impact on their investment
portfolio, while 28 per cent say that the high Canadian dollar has actually
had a very or somewhat positive impact on their investments. Of the
14 per cent of Canadian investors who report the high dollar as having had a
very or somewhat negative impact on their portfolio, 63 per cent have taken no
action to mitigate the impact.
The study also found that only 17 per cent of Canadian investors have
taken advantage of the changes to the foreign content rule and increased their
level of investment outside of Canada.
"While the fact that 28 per cent of Canadian investors say that the high
dollar has had a positive impact on their portfolio could be good news, it
could also be indicative of the fact that Canadian investors have not taken
full advantage of the legislated increase in foreign exposure," said
Mr. Kellett. "The key for investors is to periodically review their
investments to ensure that they understand their risks and are maximizing
their returns and tax effectiveness."
The Scotiabank Investment Study was conducted for Scotiabank by TNS
Canadian Facts, among members of TNS Canadian Facts' online panel. Respondents
for the survey were household investment decision makers with savings or
investments held either inside or outside of registered plans. A total of
1,097 investors participated in the online survey between December 27th, 2007
and January 3rd, 2008. Final data are weighted to be representative of
Canadian investors by age within gender within region.
Scotiabank is one of North America's premier financial institutions and
Canada's most international bank. With more than 60,000 employees, Scotiabank
Group and its affiliates serve approximately 12.5 million customers in some
50 countries around the world. Scotiabank offers a diverse range of products
and services including personal, commercial, corporate and investment banking.
With $412 billion in assets (as at October 31, 2007), Scotiabank trades on the
Toronto (BNS) and New York Exchanges (BNS). For more information please visit
For further information:
For further information: Paula Cufre, Scotiabank Public Affairs, (416)
933-1093, email@example.com; In western Canada, Deborah Spence,
Scotiabank Public Affairs, (403) 254-6830