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TORONTO, ONTARIO--(Marketwire - Oct. 14, 2011) - Last month, children across Canada headed back to grade school. This month, Canadian parents can turn their attention to how they are going to afford to send them off to colleges and universities. According to a BMO Financial Group study released today, more than two-thirds of Canadians (69 per cent) are concerned about the affordability of post-secondary education in Canada.

A four-year university degree can currently cost upwards of $60,000, and various sources estimate that a child born in 2011 could encounter education costs of approximately $140,000 when they are ready to enter university.

Despite these numbers, the study, conducted by Leger Marketing, revealed the following:

• Only half (56 per cent) of Canadians with young children have a Registered Education Savings Plan (RESP) in place
• Of those who do not have an RESP account, or are contributing less than usual, the main reason driving their decision is not having enough money (48 per cent)
• Forty per cent of respondents contributed the same amount as they did last year

"The great thing about RESPs is that a little really does go a long way," said Mark Stewart, Director, Product Development & Management, BMO Investments Inc. "When you take into account the added benefit of the Canada Education Savings Grant, along with compounded interest over time, even small amounts have an opportunity to grow into significant savings."

Mr. Stewart also reminds parents and grandparents that, aside from making regular contributions, there are plenty of additional opportunities that can be used to grow an RESP, including allocating a portion of cash gifts children receive from relatives and family friends.

According to the study, only 10 per cent of parents whose child has received money as a gift have put the money towards an RESP account, while 27 per cent of parents have put the money in a savings account or have given the child a portion to buy what they wish (29 per cent).

Other Key Findings:

• The most common investment held in an RESP account is mutual funds (39 per cent) followed by GICs (20 per cent) and bonds (15 per cent)
• Only one-in-four relatives contribute to an RESP plan in lieu of a more traditional gift
• More than 70 per cent of Canadians give their grandkids, nephews/nieces or Godchildren $100 or less in monetary gifts per year

"In order to prepare yourself for the costs ahead, it is essential to plan early for your child's education," said Mr. Stewart. "For example, if you contribute $500 per year, from the time your child is born, total savings- including the Canada Education Savings Grant as well as earnings- could exceed $20,000 by the time your child enters a post-secondary institution."

Interested in starting or contributing to an RESP? Here are some tips to get you started:

• Start early and make regular contributions – Even if your child's education will not begin for many years to come, it is beneficial to start making regular contributions as early as you can.
• Speak with a financial professional – RESPs can hold several different types of investments. Speak with a financial professional to determine the investment options that best suit your needs.
• Forego the daily splurge – Small expenses, like a fancy coffee or expensive lunch, can really add up. Aim to put the money saved towards your regular contributions.
• Inspire alternative gift-giving – RESP contributions make great gifts for special occasions. Let friends and relatives, including grandparents, know that you are receptive to receiving contributions for your children. RESP accounts can be opened by anyone, and a child can have multiple accounts.

The online survey was conducted by Leger Marketing among 1504 Canadian adults, between August 15 to 18, 2011.