OTTAWA, Oct. 12, 2016 /CNW/ - Canada places third internationally on overall levels of financial literacy, according to the OECD/INFE International Survey of Adult Financial Literacy Competencies, a report released yesterday by the International Network on Financial Education (INFE), which is part of the Organisation for Economic Co-operation and Development (OECD).
The report measures and compares the financial knowledge, attitudes and behaviours of adults in 29 countries. It also highlights the importance of focusing financial literacy efforts on changing behaviour because healthy behaviour promotes financial well-being. On financial behaviour, Canadians displayed healthy financial habits, such as setting and achieving long-term financial goals and monitoring their personal finances. When tested on financial knowledge, 60 percent of Canadians answered most questions correctly, earning a high score. Canadians also have the right attitude when thinking about money in the long term—meaning that they're likely to disagree with statements like "I tend to live for today and let tomorrow take care of itself."
While Canadians scored well overall in comparison to other countries, the report also highlighted areas in need of improvement. When it comes to financial confidence, which has been shown to support good financial decisions, Canadians need a boost. In a self-assessment, only about 30 percent of Canadians rated their financial knowledge level as high. Additionally, when it comes to financial knowledge, there was a significant difference between genders. Results show that over 70 percent of men scored high on financial knowledge compared to only 50 percent of women. More specifically, women scored lower than men on questions related to compound interest and inflation.
The report's findings align with research by the Financial Consumer Agency of Canada (FCAC) into the financial literacy gaps and needs of Canadians. FCAC is working to address these needs by helping Canadians build the confidence and knowledge to make smart financial decisions, manage money and debt, as well as plan and save for the future. Canada's place in the top three countries worldwide on financial knowledge, attitudes and behaviours speaks highly about the impact of the national, collaborative effort to improve Canadians' financial well-being.
- Canada shares its top-three ranking with France, in first place; Finland, in second; Norway, tied with Canada, in third.
- The report presents data collected through INFE's second international exercise to measure financial literacy. Canada was not part of the first exercise in 2010. As part of the measurement exercise, 1,002 Canadians were interviewed by telephone during May and June 2015.
- INFE, as well as participating countries, may use the data collected in the report as a benchmark to track progress on their financial literacy strategies.
- FCAC's analysis of the Canadian data shows that:
- One-third of Canadians have had a difficult time covering living expenses using income alone—many of the individuals who struggle draw on debt to make ends meet.
- With a loss of income, one half of Canadians would need to borrow or move within six months.
- Generally, Canadians score well on basic financial literacy questions and are moderately confident in their knowledge, which demonstrates that they need a boost. However, women and young people are less likely to score well on basic financial knowledge tests.
- November is Financial Literacy Month (FLM) in Canada. This year's FLM theme "Managing money and debt wisely: It pays to know!" promotes the idea that different stages of life demand different sets of financial literacy skills, and managing money and debt will help Canadians make responsible financial decisions.
- Organizations and individuals across Canada are encouraged to organize an event and to join the conversation on social media using the #FLM2016 hashtag.
"As Canada's first Financial Literacy Leader, I'm proud to be at the forefront of an international effort to improve the financial well-being of individuals and, even more so, that Canada is among the top five countries in this global financial literacy ranking. While Canada has made progress in this area, implementing the National Strategy for Financial Literacy—Count me in, Canada! will go a long way towards addressing the needs and gaps of Canadians."
Jane Rooney, Financial Literacy Leader, Financial Consumer Agency of Canada
- OECD/INFE International Survey of Adult Financial Literacy Competencies
- Canada's Financial Literacy Leader
- Financial Literacy Month
- Financial Consumer Agency of Canada
SOURCE Financial Consumer Agency of Canada
For further information: Natasha Nystrom, Media Relations Officer, Financial Consumer Agency of Canada, 613-941-4168, [email protected]