Half of respondents don't have a three-month financial cushion in case of emergency
QUÉBEC CITY, Nov. 8, 2011 /CNW Telbec/ - Desjardins Group (www.desjardins.com) is proud to demonstrate its commitment to financial education by
instituting the first-ever Canadian index of responsible personal
finances. This index was inspired by the definition of financial
literacy1 developed by the Federal Government's financial task force in June
2009. It's an original and comprehensive yardstick that provides a
complete assessment of the public's ability to manage their personal
finances, covering the two basic dimensions of knowledge and behaviour.
In addition to the overall index, initially calculated at 70 per cent
following a Canada-wide survey, two sub-indices have also been defined:
the knowledge index calculated at 72 per cent, and the behaviour index
calculated at 68 per cent.
"The Desjardins Personal Finance Index is a unique awareness tool that
provides us with an initial reading of Canadians' strengths and
weaknesses when it comes to managing their finances. Since this is an
unprecedented study, we're unable to compare these results to any
previous survey. Nevertheless, it clearly shows that there's room for
improvement and identifies the gaps. This will allow us to develop
better coaching and education tools. We also hope it will lead to
lasting behavioural change," explained Monique F. Leroux, Chair of the
Board, President and CEO of Desjardins Group.
Developed from an online survey of 3,000 adult Canadian respondents, the
Desjardins Personal Finance Index reveals interesting facts,
particularly about savings and retirement planning.
Findings that merit concern
Our findings show that in case of an emergency (i.e. job loss, accident,
illness), only 50 per cent of respondents could take care of their
needs and pay their bills for more than 3 months without relying on
credit and 14 per cent would not last a month. These results are not
tied exclusively to income, because only 55 per cent of households
earning over $55,000 reported they could last over 3 months.
The survey also revealed that young people age 18 to 24 are lacking
basis financial knowledge required to understand and take advantage of
savings mechanisms. Nearly half of this group were unable to answer
basic questions on real return (which takes inflation into account) and
on the notion of compound interest. Even more worrying, 70 per cent of
young people failed to correctly answer a simple question on investment
and associated risk.
Shortcomings in the area of retirement planning also came to light. Many respondents said they had no retirement savings plan at all.
Online self-evaluation tool
Regarding these findings, Ms. Leroux explained that Desjardins had
developed an online self-evaluation tool to help individuals assess and
improve their personal finance management skills and develop
"Desjardins wants to help prevent financial difficulties, equip people
with tools that foster responsible management of personal finances and,
in particular, help them to realize their dreams. Acquiring good
financial habits and setting up a financial plan are key factors that
usually ensure greater financial freedom. We believe awareness is the
first step in adopting new and lasting habits," she stated.
The online self-evaluation tool and the complete results of the survey
are available on the Co-opme Program website at www.desjardins.com/co-opme.
Co-opme is a vast program intended to expand upon Desjardins Group's
initiatives in education and cooperation and further contribute to
creating sustainable prosperity. Backed by its 110 years of leadership,
Desjardins continues to demonstrate the scale of its commitment by
investing 1 per cent of its annual surplus earnings in the Co-opme
Program, for a total of nearly $40 million dedicated to education and
cooperation in 2011. The Co-opme Program serves to encourage
responsible personal finance management, create innovative products to
foster savings and responsible credit habits, promote personal
development and training for the next generation, and expand the
recognition and influence of the cooperative movement.
About Desjardins Group
Awarded the coveted title "Bank of the Year 2010 - Canada" by the UK
magazine The Banker, Desjardins Group is the leading cooperative financial group in Canada
and the sixth largest in the world, with assets of over $188 billion.
Drawing on the strength of its caisse network in Québec and Ontario,
and its subsidiaries across Canada, it offers a full range of financial
products and services to its 5.8 million members and clients.
Desjardins specializes in Wealth Management and Life and Health
Insurance, in Property and Casualty Insurance, in Personal Services, in
Business and Institutional Services. As one of the largest employers in
the country and among Canada's Top 100 Employers for 2012TM, Desjardins is supported by the skills of its 43,600 employees and the
commitment of nearly 6,000 elected officers. For more information,
1Definition of financial literacy: "Financial literacy means having the
knowledge, skills and confidence to make responsible financial
SOURCE DESJARDINS GROUP
For further information:
Source (for journalists only):
514-281-7000, ext. 7275 - 1-866-866-7000, ext. 7275