MONTREAL, QUEBEC--(Marketwire - Feb. 28, 2013) - According to the BMO Household Savings Report released today, Canadians planning to save in 2013 are aiming to put away an average of $9,859 in order to meet their goals - an increase of nearly $600 over last year, or approximately 7 per cent.
Residents of Quebec, for their part, expect to save $5,477, the lowest amount of any Canadian province or region, with Albertans expected to save some $18,000 during the year. Women will also save less than men, as outlined in the table below.
Personal Savings by Region and Gender
|Planned Savings for 2013
While debt levels continue to receive much attention, the report, based on a survey conducted by Pollara, shows a brighter side of the personal finance ledger.
The report reveals the various different investment vehicles that Canadian savers plan to use to reach their savings goals:
- The majority of Canadians are using a Registered Retirement Savings Plan (RRSP) or a chequing account (63 per cent and 57 per cent respectively)
- Half (49 per cent) use a Tax Free Savings Account (TFSA)
- One third (29 per cent) are using a high-interest savings account
- Another quarter (25 per cent) are stashing their savings in Guaranteed Investment Certificates (GICs)
"It's encouraging to see Canadians are planning to maintain or increase their personal savings this year, particularly as we look to turn around decreasing rates of savings," said François Hudon, Senior Vice-President, Quebec Division, BMO Bank of Montreal. "It's essential that households build themselves a financial cushion, whether it be for retirement or other goals. I urge our clients and Quebec residents to focus on this during the coming year and to draw upon the expertise of financial services professionals."
To help households stretch their dollars, Mr. Hudon noted the No Fee BMO IGA AIR MILES Chequinq Account that enables clients to save up to $190 annually, with no monthly fee and no minimum balance required. The account also features free transactions online at BMO ATMs or by telephone, and debit card purchases anywhere. The BMO IGA AIR MILES Savings Account offers BMO's highest interest rate with no minimum balance requirement. These accounts offer bonus AIR MILES reward miles and generate cost savings, convenience and added value for clients.
The BMO study shows that optimism is tempered by the fact that only half (48 per cent) say they are saving enough to meet their goals, with high expenses (71 per cent), low income (65 per cent), and debt repayment (52 per cent) cited as the top barriers to increased savings.
According to BMO Economics, the personal savings rate in Canada, calculated by Statistics Canada, currently lies near historic lows at 3.9 per cent. By way of comparison, the rate climbed above 6 per cent during the height of the latest recession, and reached almost 20 per cent in the early 1980s.
The report also identified the most common savings goals in 2013 among Canadians:
- Retirement savings and emergency savings tied for second (at 42 per cent) on the priority list in 2013
- Nearly one-third of Canadians (29 per cent) are putting money aside for home renovations in 2013, while one in five will be saving towards the purchase of a new vehicle (20 per cent)
- Education savings are on the priority list for 19 per cent of Canadians, followed by the purchase of a new home (15 per cent)
- However, vacations and the purchase of luxury items, entertainment and hobbies topped the list, with 66 per cent of Canadians putting cash away for these types of purchases
The BMO Household Savings Report was based on a Pollara survey conducted online between January 10 and 15, 2013, with a sample of 1,000 Canadians. A probability sample of this size would yield results accurate to ± 3.1 per cent 19 times out of 20.
Data has been weighted by region, gender and age, based on the most recent Census figures, so that it is representative of all adult Canadians.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at January 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.