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Canada Financial Literacy Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Financial Literacy - Canada market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Consumer Question Topics

  • Product Ownership
  • Financial Challenges
  • Financial Education
  • Budgeting and Savings
  • Financial Planning
  • Knowledge of Financial Topics

What You Should Know

The level of financial literacy in Canada is not very high. This has implications for the banking and investment industries as well as for the long-term personal financial security of many Canadians. Without an understanding of basic financial concepts, people are not well equipped to make decisions related to financial management. People who are financially literate have the ability to make informed financial choices regarding saving, investing, borrowing and investing. Financial knowledge is especially important in times where increasingly complex financial products are easily available to a wide range of the population. Moreover, changes in the pension landscape transfer decisionmaking responsibility to participants who previously relied on their employers or governments for their financial security after retirement. Financial illiteracy can carry significant costs.

Meanwhile, the potential benefits of financial literacy are many. People with strong financial skills do a better job planning and saving for retirement. Financially savvy investors are more likely to diversify risk and take a longer-term view of investing. Given the many ways financial literacy affects financial behaviour, it is important to understand the extent of consumer understanding of basic financial concepts as well as the degree to which financial skills fall short among groups like the young, women and the poor.

About the Report

This Report examines how consumers feel about the way they manage money, product ownership and financial challenges faced, their financial management habits and how they get information about personal finance.

Regional classifications

  • Prairie Provinces: Alberta, Saskatchewan and Manitoba
  • Atlantic Provinces: New Brunswick, Newfoundland/Labrador, Nova Scotia and Prince Edward Island

Income

Throughout the Report, income data refers to annual household income.

Expert analysis from a specialist in the field

Written by Sanjay Sharma, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

A concerted effort from government, industry, the school systems and the general public is required to improve the financial literacy of Canadians as its importance has perhaps not sufficiently caught on in the public consciousness. Sanjay Sharma
Senior Financial Services Analyst

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Only 6% of Canadians are unbanked
                • Figure 1: Ownership of financial products, May 2018
              • Rising cost of education makes student loans the top financial challenge
                • Figure 2: Financial challenges, May 2018
              • Online courses are of most interest to Canadians
                • Figure 3: Interest in methods of financial education, May 2018
              • Older Canadians are careful financial managers
                • Figure 4: Attitudes related to budgeting (% agree), by age, May 2018
              • The opportunities
                • Better financial literacy can help young Canadians
                  • Figure 5: Financial challenges, by age, May 2018
                • One in five parents are interested in financial apps for their children
                  • Few young women have an adequate emergency financial cushion
                    • Figure 6: Agreement with “I have an emergency savings account that equals at least 3 months of my household income”, men vs women 18-34, May 2018
                  • Parents with young children are financially stressed
                    • Figure 7: Attitudes related to budgeting (% agree), parents vs non-parents, May 2018
                  • What it means
                  • Market Factors – What You Need to Know

                    • Canada’s population is ageing
                      • Diminished capacity among seniors has consequences
                        • Immigration drives Canada’s population growth
                          • Financial literacy initiatives rolling out across Canada
                            • Advocis helping Canadians build financial savvy to shape their futures
                            • Market Factors

                              • Canada’s population is ageing
                                • Figure 8: Population aged 0-14 and 65+, as of 1 July 1995-2035*
                              • Diminished capacity among seniors impacts their financial literacy
                                • Immigration and financial literacy
                                  • Figure 9: Population growth, 1985/86-2015/16
                                • Financial literacy initiatives rolling out across Canada
                                  • New programme builds on Manitoba’s success in financial education
                                    • Ontario launches plan to teach high school kids financial skills
                                      • Advocis helping Canadians build financial savvy to shape their futures
                                      • Industry Developments and Innovations – What You Need to Know

                                        • Mylo and financial rounding apps
                                          • BlackRock invests in Acorns
                                            • Mogo reaches 600,000 members
                                              • Credit Karma launches Canada's first free credit monitoring service
                                                • Caution urged for Canadians investing with crypto-asset trading platforms
                                                • Industry Developments and Innovations

                                                  • Mylo and financial rounding apps
                                                    • Other apps
                                                      • BlackRock invests in Acorns; Acorns integrates with PayPal
                                                        • Mogo reaches 600,000 members
                                                          • Bank of Canada partners with Creative Destruction Lab
                                                            • Caution urged for investing with crypto-asset trading platforms
                                                              • Credit Karma launches Canada's first free credit monitoring service
                                                                • LendingArch’s new rate comparison technology
                                                                • Key Players – Marketing Campaigns

                                                                  • Kick start your training with Finfit
                                                                    • Figure 10: RBC’s Finfit email, April 2018
                                                                  • Ally Bank announces a new debit card for kids
                                                                    • Acorns Later, a new retirement planning tool from Acorns
                                                                      • Figure 11: Acorns Later, May 2018
                                                                    • Erica
                                                                      • Figure 12: Bank of America’s virtual assistant “Erica”, May 2018
                                                                    • Capital One Financial superpower campaign
                                                                      • Figure 13: Discover your financial superpower, Capital One, June 2018
                                                                  • The Consumer – What You Need to Know

                                                                    • Only 6% of Canadians are unbanked
                                                                      • Rising cost of education makes student loans a financial challenge
                                                                        • Canadians are interested in online courses
                                                                          • Most Canadians pay their bills on time
                                                                            • Men more likely to have a financial plan
                                                                              • Few young women have an adequate emergency financial cushion
                                                                              • Product Ownership

                                                                                • Only 6% of Canadians are unbanked
                                                                                  • Figure 14: Ownership of financial products, May 2018
                                                                                • Potential solutions for servicing the unbanked
                                                                                  • Women have a lower investment ownership
                                                                                    • Figure 15: Ownership of financial products (select), by gender, May 2018
                                                                                  • Payday loans can spiral into a debt trap
                                                                                    • Lifestage is a key determinant of product ownership
                                                                                      • Figure 16: Ownership of financial products (select), by age, May 2018
                                                                                  • Financial Challenges

                                                                                    • Rising cost of education makes student loans the top financial challenge
                                                                                      • Figure 17: Financial challenges, May 2018
                                                                                    • Saving for children’s education is among the top three parental challenges
                                                                                      • Figure 18: Financial challenges (select), parents vs non-parents, May 2018
                                                                                    • Saving for retirement is the top challenge for 35-54s
                                                                                      • Figure 19: Financial challenges, by age, May 2018
                                                                                    • Paying down credit card debt/day-to-day bills are among the top challenges for 18-34s
                                                                                      • Better financial literacy can help young Canadians
                                                                                      • Financial Education

                                                                                        • A quarter of Canadians are interested in online courses
                                                                                          • Figure 20: Interest in methods of financial education, May 2018
                                                                                        • Few gender differences exist
                                                                                          • Figure 21: Interest in methods of financial education (select), by gender, May 2018
                                                                                        • Younger Canadians are more interested in financial education
                                                                                            • Figure 22: Interest in methods of financial education (select), by age, May 2018
                                                                                          • One-on-one meeting with a financial professional key for 18-34s
                                                                                            • Other methods of financial education
                                                                                              • Asian Canadians more interested in financial education opportunities
                                                                                                • Figure 23: Interest in methods of financial education (select), Asian Canadians vs overall, May 2018
                                                                                              • A fifth of parents are interested in financial apps for their children
                                                                                                • TURF Analysis
                                                                                                  • Half of Canadians can be educated through meetings, online courses and apps
                                                                                                    • Figure 24: TURF Analysis – Interest in financial education, May 2018
                                                                                                    • Figure 25: Table – TURF Analysis – Interest in financial education, May 2018
                                                                                                • Budgeting and Savings

                                                                                                  • Most Canadians pay their bills on time
                                                                                                      • Figure 26: Attitudes related to budgeting (% agree), May 2018
                                                                                                    • Older Canadians are careful financial managers
                                                                                                      • Figure 27: Attitudes related to budgeting (% agree), by age, May 2018
                                                                                                    • Over a third of higher-income households have an emergency financial cushion
                                                                                                      • Few young women have an adequate emergency financial cushion
                                                                                                        • Figure 28: Agreement with “I have an emergency savings account that equals at least 3 months of my household income”, men vs women 18-34, May 2018
                                                                                                      • Parents with young children are financially stressed
                                                                                                        • Figure 29: Attitudes related to budgeting (% agree), parents vs non-parents, May 2018
                                                                                                      • Around three in 10 have a financial advisor
                                                                                                        • Figure 30: Attitudes related to saving (% agree), May 2018
                                                                                                      • Three in 10 are “automatic” savers
                                                                                                        • Around two in five 45-64s contribute regularly to their retirement savings
                                                                                                          • Figure 31: Attitudes (select) related to saving (% agree), by age, May 2018
                                                                                                      • Financial Planning

                                                                                                        • Men more likely to have a financial plan
                                                                                                          • Figure 32: Attitudes related to financial planning, by gender, May 2018
                                                                                                        • Reinforcing the importance of financial planning/advice
                                                                                                          • Around two in five 18-44s would like to learn how to manage their finances better
                                                                                                            • Figure 33: Attitudes related to financial planning, by age, May 2018
                                                                                                        • Knowledge of Financial Topics

                                                                                                          • Majority of consumers are knowledgeable about credit cards
                                                                                                            • Figure 34: Knowledge of financial topics (% agree), May 2018
                                                                                                          • Older consumers are more knowledgeable about financial products
                                                                                                            • Figure 35: Knowledge of financial topics (% agree), by age, May 2018
                                                                                                          • Only around one in five Canadians follow the stock market
                                                                                                              • Figure 36: Knowledge of financial topics (% agree), May 2018
                                                                                                          • Appendix – Data Sources and Abbreviations

                                                                                                            • Data sources
                                                                                                              • Consumer survey data
                                                                                                                • Abbreviations and terms