Twenty-seven percent of Canadians plan to contribute more annually to their tax-free savings account (TFSA) following the federal government’s decision to increase the annual contribution limit to $10,000 from $5,500, according to a survey.
The CIBC poll also finds that another 34% say they simply don’t have the funds to take advantage of the new maximum.
Read: Politics could shrink TFSA contribution room
Highlights of the poll include:
- 70% say they were aware that the government raised the annual TFSA limit to $10,000 from $5,500;
- 4% have already topped up their TFSAs to $10,000;
- 20% say they don’t have a TFSA and have no plans to open one; and
- 7% say they don’t have a TFSA but now plan to look into opening one due to the higher contribution limit.
The poll also finds that Canadians aged 55 and over demonstrated much stronger awareness (84%) about the new contribution limit than younger Canadians aged 18 to 34 (55%). Canadians 55 and over were also twice as likely as younger Canadians to say they typically contribute the maximum to their TFSAs, while those in their highest spending years (35 to 54) were least likely to contribute.
Read: How the TFSA limit increase changes the savings landscape
“It’s encouraging to see Canadians are well aware of the increased TFSA limit, and that some are focused on increasing their contribution, though not everyone is able to,” says Veni Iozzo, senior vice-president, deposits, GICs and client solutions at CIBC.
According to the poll, some Canadians say they already had trouble reaching the $5,500 limit; others are saving in their RRSPs and RESPs instead; or they just don’t have enough extra money. Many others don’t have a TFSA.
More than 3,000 Canadians participated in the poll, which was conducted less than two weeks after the April 21 federal budget announced the increased TFSA contribution limit.
Also read: