Financial security is 'increasingly elusive' for poorer people says Co-operators’ executive in response to new Prosper Canada report
Canadians on low incomes need more help from the financial services sector to help them build financial resilience and security, especially with today’s challenging economic environment.
That’s the call to action from a new report from national charity Prosper Canada that shows an increasingly vulnerable sector of the population that lacks access to the tools they need to turn things around.
Backed by Co-operators, the report calls for “affordable, appropriate and trustworthy financial help for people with low incomes” which it says is critical but a missing piece in Canada’s financial services landscape.
There are several key reasons why lower income people may not be getting the financial help that they desperately need.
Trust is a big one, with many low-income people not trusting financial professionals and those who are Indigenous or racialized not feeling respected by them.
Cost is also a concern but so is the availability of mainstream financial information that reflects their circumstances.
For the financial services sector, the report highlights that low profitability of low-income clients means there is no strong commercial case for serving their needs.
Confusing maze of financial products
Elizabeth Mulholland, CEO of Prosper Canada, says that low-income Canadians are left to navigate their way through an often-confusing maze of financial products and services on their own, leading to potentially bad choices.
“Government benefits and credits that can help them to build their financial health are often also very hard to navigate and access effectively," she said. "When we fail to ensure people with low incomes have access to affordable, appropriate and trustworthy help to safely navigate these financial services, the result is widespread and unnecessary financial stress, hardship, and crisis."
Chad Park, vice-president of Sustainability and Citizenship at Co-operators, added that people with low incomes find financial security “increasingly elusive.”
"The findings in today's report highlight a critical societal gap and an ill-met need that has been largely left unaddressed by the financial sector,” he said. “Equipped with this research, financial services providers can and should take necessary steps to build a more inclusive and resilient financial system for all Canadians."
