2013/2/22 - Canadians Falling Short on Savings Goals Due to Lack of Planning: BMO Report

The BMO Household Savings Report found that Canadians are aiming to save an average of $9,859 in 2013; however, three-in-ten (31 per cent) have no plan at all to help them achieve their savings goals. Rather, they simply put aside what they can. Further, more than half of Canadian savers (52 per cent) feel they are not saving enough to meet their goals, with one-third (36 per cent) of this group lacking a savings plan.

"We commend Canadians who are committed to making saving a priority this year and would encourage them to create a financial plan to assist them in reaching their goals," said Ernie Johannson, Senior Vice President, Personal Banking, BMO Bank of Montreal. "Having a plan in place is key to achieving both short and long-term financial success."

On the bright side, the report found:

--  One-quarter (25 per cent) have a fixed financial plan in place that
    includes making regular monthly contributions to their savings, and; 
--  35 per cent have a rough plan that includes regular contributions.

The survey also revealed that those who have a fixed savings plan in place are the most likely to be saving for their retirement (52 per cent); followed by those with a rough plan (48 per cent). Those with no fixed or rough savings plan in place are the least likely to be saving for their retirement (31 per cent).

According to BMO Economics, Canadians still need to ramp up their savings in coming years - from the current three to four per cent range to just under nine per cent - if they hope to meet their longer term financial goals.

"It can be challenging to manage multiple financial priorities, such as saving for your child's education, paying off debt or investing in your retirement," said Ms. Johannson. "To help build a balanced savings approach, consider meeting with a financial professional to put a plan in place that can help you balance achieving these important goals and managing day to day living expenses."

Ms. Johannson added that BMO offers the BMO Smart Saver Account - a high interest savings account that allows for unlimited deposits and transfers into and out of the account and free access to BMO MoneyLogic(TM) - an online personal financial management tool to help track everyday expenses. Currently the BMO Smart Saver account offers a 1.2 per cent interest rate - the highest rate offered among Canada's major financial institutions for a full-service savings account without minimum balance requirements.

As part of its ongoing commitment to 'Making Money Make Sense', BMO has introduced various tools to help Canadians effectively manage their personal finances, including BMO MoneyLogic, BMO by Appointment, BMO SmartSteps, BMO SmartSteps for Parents and BMO SmartSteps for Business.

The BMO Household Savings Report was conducted via a Pollara online survey between January 10th and 15th, 2013, with a sample of 1,000 Canadians. A probability sample of this size would yield results accurate to +/- 3.1 per cent, 19 times out of 20. Data has been weighted by region, gender, and age, based on the most recent Census figures, so that it is representative of all adult Canadians.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $525 billion as at October 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.