A new survey suggests that Canadians need a financial crash course
The results of a new survey suggest that while Canadians may consider themselves financially literate, there are gaps in their knowledge that they don’t realize.
In a recent poll commissioned by LowestRates.ca, 78% of Canadians declared that they were financially literate. However, when all the respondents took a quiz consisting of 15 questions, nearly six in 10 did not pass.
Based on the results, it seems that Canadians are not clear about the terminology surrounding specific financial instruments like mortgages, auto insurance policies, and tax-free savings accounts (TFSA). Most of those who passed got a grade of only C or D.
Some of the questions asked, along with the percentage of respondents who answered wrong, were:
- “You never have to report interest and profits gained in your TFSA when filing taxes” – 65%;
- “You can have multiple TFSA accounts with different banks at the same time” – 58%;
- “You need to be licensed to buy stocks in Canada” – 45%
Men were significantly more likely than women to rate themselves as financially literate; 84% of men rated themselves as excellent or good, while only 73% of women did so. While Canadians who self-rated as highly financially literate were more likely to pass, fewer than half of them actually did.
The results were also broken down by generation group. Millennials were the most likely to rate their own financial literacy as excellent, but they had the lowest passing rate (31%). The results were somewhat better for Baby Boomers (52%) and Gen-Xers (45%).
Self-rating of financial literacy was also linked with education, with 87% of university graduates self-rating as excellent or good, as opposed to just 77% for those with a high school diploma.
“Financial literacy continues to be a hot topic and we know it needs to improve, but Canadians need to be honest with themselves about what they don't understand,” said LowestRates.ca CEO Justin Thouin.
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