Changes to the UCCB can help boost RESP savings
Raising a family can be an expensive endeavour. To help Canadians subsidize some of the costs associated with raising children, the federal government has introduced changes to the Universal Child Care Benefit (UCCB) support program.
Since 2006, Canadian families have received $1,200 annually for each child under age six through the UCCB. In January, the government increased that annual UCCB payment to $1,920 for each child (under six).
The government also expanded the program to provide families $720 each year for all children aged six through 17. The first payment under the new UCCB schedule was issued in July 2015 and includes any retroactive payments for January to June 2015.
How can this make a difference to your family?
Have you considered the value of a registered education savings plan (RESP)?
This may be an excellent opportunity to explore how you can use your UCCB to enhance your investment strategy. With an RESP, investors can earn an additional $500 each year towards post-secondary education through the Canada education savings grant – a 20 per cent grant on the first $2,500 contributed annually to an RESP.
Here are a few other ways RESPs can benefit you:
- They cover more than just the cost of tuition – RESPs can be used for other expenses related to education, such as housing, food, books, technology needs and travel
- RESPs don’t have an annual maximum contribution amount, although there is a $50,000 lifetime cap
- You can hold the plan open for up to 35 years, designate another beneficiary, or you may be able to roll the money over into a registered retirement savings plan (RRSP) should those post-secondary education plans change
If you’re interested in learning more about saving for your child’s post-secondary education, or how you may benefit by increasing RESP contributions, please contact your financial security advisor and investment representative. Together you can develop a financial security plan that will help set your child on the path to success.