A poll commissioned by Fidelity Investments shows that now that the law has been permanently extended to allow parents to make tax free withdrawals from 529s, more than half of parents said they are likely to open a 529 plan, Reuters reports.
Currently, only 25% of parents use 529 plans, the poll showed. A majority, 52%, use bank savings accounts and 29% use U.S. savings bonds.
Among those who already have a 529 account, more than one third plan to increase their contributions.
However, the poll found that 70% of parents said high living expenses impede their ability to save for their children’s college education, and although 89% expect to at least help pay for college, 44% have not started to save.
The poll, conducted by Synovate Research, was among 1,032 parents with children age 10 or younger.