Tangerine survey finds TFSA knowledge gap among Canadians

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May 01, 2015, 09:00 ET

Over a quarter don't understand how TFSAs work, many unaware of recent contribution limit changes

TORONTO, May 1, 2015 /CNW/ - A recent survey by Tangerine* found that despite an increasing amount of attention on TFSAs (Tax-Free Savings Accounts) in recent weeks, over a quarter (28 per cent) of Canadians are still unsure of how these accounts work. In addition, just over half (56 per cent) could identify the new TFSA contribution limit of $10,000 and only 14 per cent could identify the effective date of this new contribution limit (January 1, 2015).

Of those Canadians surveyed, 51 per cent reported that they have a TFSA. But even among these account holders, the survey found confusion when it comes to contribution limits and rules. According to the findings, 31 per cent of the TFSA holders surveyed are unaware you can carry over contribution room from previous years, and the same amount (31 per cent) are unaware they can contribute to their TFSA at any time throughout the year.

"At Tangerine our goal is to provide Canadians with the tools and resources they need to make smart decisions with their hard-earned money," said Silvio Stroescu, Managing Director of Deposits and Investments at Tangerine. "The Forward Thinking section of our website serves as a hub for practical information on a variety of personal finance matters, including the top things Canadians need to know about TFSAs in order to understand how the account could help them get ahead."

When it comes to contributions, of those Canadians surveyed who have a TFSA, 62 per cent reported that they only contribute to it once a year. When asked what they are currently using this account for, the majority (38 per cent) indicated they are using it to save for retirement. In addition, 42 per cent reported that they have previously maxed out their account - but when asked if they plan on maxing it out now that the limit has increased to $10,000, this number decreased to 30 per cent.

For those Canadians who don't have a TFSA, 9 per cent reported that they plan on opening one this year, and 40 per cent are undecided. Over half (51 per cent) reported they don't plan on opening a TFSA this year and the majority of these respondents (66 per cent) cited that it's because they don't have enough money.

For information and tips on how a TFSA can work for you, visit ForwardThinking.Tangerine.ca. Recent stories and information includes:

For Tangerine clients who have already maxed out their TFSA, even with the new limit for 2015, a Tangerine 2016 TFSA Kick Start Account can help them start saving up for their 2016 TFSA contribution beginning right away. The 2016 TFSA Kick Start Account, which is an unregistered savings account, is available from May 1, 2015 to December 31, 2015 and pays an interest-matching Bonus when the Account balance is moved to a TFSA on January 1, 2016. More information about how it works is available at tangerine.ca.

*Survey methodology
From April 27^th to April 28^th, 2015 an online survey was conducted among 1,509 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 2.5%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

About Tangerine
Tangerine is a direct bank that delivers simplified everyday banking to Canadians. With more than 1.9 million clients and close to $38 billion in total assets, we are Canada's leading direct bank. Tangerine offers banking that is flexible and accessible, products and services that are innovative, fair fees, and award-winning client service. From no-fee daily chequing and high-interest savings accounts, GICs, RSPs, TFSAs, mortgages and mutual funds, Tangerine has the everyday banking products Canadians need. With over 1,000 employees in Canada, our presence extends beyond our website and Mobile Banking app to our 24/7 Contact Centres, Café locations and our Pop-Up locations. Tangerine was launched as ING DIRECT Canada in 1997. In 2012 it was acquired by Scotiabank, and operates independently as a wholly-owned subsidiary. For more information, visit tangerine.ca.

Tangerine is a trademark of The Bank of Nova Scotia, used under license.

SOURCE Tangerine