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BMO Financial Group

March 04, 2015 06:30 ET

BMO Annual Post-RRSP Deadline Study: Fewer Canadians Contributed This Year, but Average Contribution Amount Increased

- Fifty-seven per cent of Canadians contributed before the March 2 deadline, down from 65 per cent in 2014 and 62 per cent in 2013

- Average contribution amount was $3,737, up from $3,518 in 2014 and $3,544 in 2013

- Forty-three per cent contributed to their RRSP because they believe it is the "responsible thing to do"

TORONTO, ONTARIO--(Marketwired - March 4, 2015) - BMO Financial Group today issued its Sixth Annual Post-RRSP Deadline Study, which reveals what percentage of Canadians made a Registered Retirement Savings Plan (RRSP) contribution for the 2014 tax year before the March 2nd deadline, how much money they contributed and the reasons behind their decision to make a contribution.

The study found that more than half of Canadians (57 per cent) reported that they made a contribution to their RRSP this year. However, this is lower than last year when almost two thirds (65 per cent) made a contribution, and 2013, when 62 per cent stated that they contributed to their RRSP.

The study also found that Canadians contributed an average of $3,737 this year, which is $200 more than what was contributed in the past two years ($3,518 in 2014 and $3,544 in 2013).

"While it's great to see that a majority of Canadians contributed this year and that the average contribution size is higher than in previous years, it's a concern that the percentage of those who put money towards their RRSPs is down," Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "For those who find contributing to their RRSP a daunting task, consider investing a small amount of money each month through a continuous savings plan. That way, you don't have to worry about coming up with a large lump sum right before the deadline."

Why Did Canadians Contribute?

The study also examined why Canadians did or did not contribute to an RRSP. Of those who did contribute this year, their reasons for doing so included:

  • It is the responsible thing to do (43 per cent)
  • For the tax refund (38 per cent)
  • It makes me feel good about myself (33 per cent)
  • I am worried I will not have enough money saved for retirement (25 per cent)

Of those who did not contribute this year, their reasons included:

  • I do not have enough money (38 per cent, down from 46 per cent in 2014)
  • I have other expenses that take priority (25 per cent, down from 31 per cent in 2014)
  • I used other types of investments, i.e. TFSA (21 per cent, up from 19 per cent in 2014)

"Contributing to your RRSP is a step towards saving for a secure financial future in retirement. Furthermore, contributing will reduce taxes payable on earned income and may provide you a tax refund, with which you can save, invest or use to pay down debt," said Mr. Buttigieg.

Plans for RRSP Tax Refund

According to the study, of those who plan on receiving money back from the Canada Revenue Agency after making an RRSP contribution, one third (34 per cent) plan on saving or investing the money. This percentage has been declining steadily over the past two years, from 36 per cent in 2014 and 39 per cent in 2013. Other intentions for RRSP tax refunds include:

  • Paying down mortgage (15 per cent, down from 18 per cent last year)
  • Home renovations (13 per cent, up from 10 per cent last year)
  • Travel or purchase leisure items (11 per cent, down from 16 per cent last year)

Regional Breakdown:

Region % who made an RRSP contribution (2014 tax year vs. 2013 tax year) Average $ amount contributed (2014 tax year vs. 2013 tax year) % who think contributing is the responsible thing to do % who did not have enough money to contribute % who plan to save or invest tax refund (2014 tax year vs. 2013 tax year)
National 57/65 3,737/3,518 43 38 34/36
Atlantic 46/62 3,657/2,785 49 44 29/33
Quebec 56/63 2,961/3,444 33 23 40/33
Ontario 58/68 3,717/3,811 42 45 31/36
Prairies 51/60 4,467/4,338 49 45 38/37
Alberta 60/67 5,574/3,270 53 35 37/49
B.C. 61/61 3,470/2,926 54 42 29/35

For more information on planning for retirement, please visit www.bmo.com/retirement.

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The survey was conducted by Pollara with an online sample of 1002 Canadians 18 years of age and over, between February 24th and 25th, 2015. A probability sample of 1,002 would yield results accurate to ± 3.1 per cent, 19 times out of 20. Results have been weighted using the latest census data to be representative of Canadians as a whole.

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