Desjardins launches the first-ever Canadian Personal Finance Index

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 responsible habits.

"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, visit www.desjardins.com.


1Definition of financial literacy: "Financial literacy means having the knowledge, skills and confidence to make responsible financial decisions."


SOURCE DESJARDINS GROUP

For further information:

Source (for journalists only):
Nathalie Genest
Spokesperson
Desjardins Group
514-281-7000, ext. 7275 - 1-866-866-7000, ext. 7275
media@desjardins.com

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