Boosted TFSA limits: survey finds 27% plan to contribute more

With tax refunds coming in and new higher limits on the tax-free savings account, some Canadians are feeling optimistic about their ability to save.

A survey for CIBC found 27 per cent of respondents plan to contribute more to the TFSA this year and four per cent have already put the money in.

• TFSAs: Who really benefits from new contribution limits?
• Tax-free savings accounts rob tax revenue from the future: Don Pittis

About 10 per cent of those surveyed said they typically put in the full amount.

The federal government has increased the annual contribution limit for the investment accounts from $5,500 to $10,000.

The survey found 70 per cent of respondents knew about the change.

Older Canadians more aware of limits

People over age 55 were more likely to know about the increased limits, compared to younger Canadians aged 18 to 34.

The increase in TFSA limits was controversial in part because it favours wealthy seniors, who are more likely to be putting money away, while young Canadians are unlikely to be able to benefit.

About 84 per cent of older respondents knew about the changes, compared to 55 per cent of younger Canadians.

More than one third of respondents said they don't have the funds to top up their TFSA and 27 per cent said they've never had a TFSA.

Among those not likely to contribute, most said they had too little money, but four per cent said they would be contributing to an RRSP or RESP instead.

When compared to everyone eligible to make contributions, only about fiveper cent of Canadians are putting the maximum amountinto their TFSAs on an annual basis, according to the Finance Department.

People age 55 and older make up 70 per cent of those contributing the limit.

The online survey was done for CIBC by Angus Reid betweenApril 30andMay 4, 2015, just after the federal budget announcing the new limits.

The survey was conducted among 3,011 randomly selected Canadian adults who are Angus Reid Forum panellists in a group statistically weighted according to education, age, gender and region.