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Scotiabank: Fewer Canadians Plan to Make RSP Contributions This Year

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Only 3 in 10 Canadians plan to contribute to an RSP plan this year according to a Scotiabank survey.

This is an 8 percent decrease from the 39 percent who made contributions both in 2012 and 2011. Additionally, Scotiabank's Annual Investment Poll reports that three quarters of respondents (74%) who hold RSPs, and consider contributing more, say lack of affordability is top reason for not increasing payment amounts, compared to 84 percent in 2012.

The study also shows that 40 percent of Canadian RSP holders have withdrawn funds from their plans, up 4 percent from 2012. The top reason offered for making withdrawals is to take advantage of the Home Buyers' Plan to buy (or build) a first home (16% vs. 15% in 2012). Covering day-to-day living expenses (8% vs. 5% in 2012) is the next most common reason followed by paying down debt (8% vs. 6% in 2012) and doing home renovations (5% vs. 3% in 2012).

"With the new year underway and the RSP contribution deadline (March 3) less than two months away, we want to encourage Canadians to meet with a financial advisor," says Mike Henry, Senior Vice President of Retail Payments, Deposits and Lending at Scotiabank.

Henry adds: "RSPs continue to be an important and tax-effective way to maximize retirement savings. If affordability is an issue, a financial advisor can help identify ways to make that all-important contribution, big or small, as well as develop a financial plan to help achieve retirement goals."