SURVEY: Majority of Middle-Income Canadians Report Lacking Basic Financial Education

Rhea-AI Summary

Primerica released its latest Financial Security Monitor™ survey, indicating that most middle-income Canadians lack basic financial education. The survey reveals 68% believe their education didn't prepare them for managing finances. Specific gaps include understanding taxes (85%), managing loans (81%), and setting budgets (77%). Despite financial challenges and inflation concerns, 65% rate their personal finances positively, though 75% see their province's economic health as poor. Saving habits are improving, with 72% holding a savings account. Inflation and health expenses are top worries (61% each). Most (72%) think financial advice should be universal, but only 38% think they can afford it.

Positive

• 65% of middle-income Canadians rate their personal finances as good or excellent.
• 72% of middle-income Canadians have a savings account, showing an increase in saving habits.
• 58% possess self-funded, tax-free savings accounts, and 47% have registered retirement accounts, indicating proactive saving for the future.
• 72% believe access to a financial professional should be universal, reflecting the perceived importance of financial advice.

Negative

• 68% of middle-income Canadians feel their education did not prepare them for managing personal finances.
• 85% report schools inadequately taught the impact of taxes on finances.
• 81% state schools did not adequately teach how to manage loans.
• 77% believe schools did not properly instruct on setting household budgets.
• 75% of middle-income Canadians rate their province's economic health as poor.
• 35% of middle-income Canadians lack an emergency fund, highlighting financial vulnerability.
• Only 38% think they can afford a financial professional, suggesting a perceived financial barrier to accessing professional advice.

Understanding taxes, managing loans, setting household budgets among tasks families feel traditional education didn’t properly address

MISSISSAUGA, Ontario--(BUSINESS WIRE)-- Primerica, Inc. (NYSE: PRI), a leading provider of financial services and products to middle-income families in North America, released its latest Financial Security Monitor^TM (FSM^TM) survey for Canada reflecting how middle-income families feel about their finances. The survey highlights significant concern about Canadians’ financial education and economic outlook, particularly amid growing inflation.

The survey found more than two-thirds (68%) of families feel their education did not adequately prepare them for managing their finances in adulthood. Specifically, a majority report that schools did not properly teach them basic financial principals, including the impact of taxes on their finances (85%), how to take out and pay back loans (81%), planning for the use and repayment of student loans (78%) or setting a household budget (77%).

The lack of financial education may be why nearly three-quarters (72%) of Canadians believe access to a financial professional should be universal. However, less than two-fifths (38%) think they can afford one.

"At a time when many Canadians feel uncertain about inflation and their financial futures, our survey highlights significant gaps in financial education and preparedness, as well as the misconception that financial advice is too costly for middle-income families," said John Adams, CEO of Primerica Canada. "We have long recognized these households need support, and we continue to advocate for making this type of support affordable to help Canadians of all income levels build and maintain financial security.”

The survey also highlights broader attitudes around financial uncertainty and local economic conditions. While a majority (65%) report feeling good about their own personal finances, three-quarters (75%) of middle-income Canadians rate the economic health of their province as poor. The survey also found Canadians remain highly concerned about inflation (61%) and physical health (61%), while expressing less worry overpaying for food (39%) and retirement savings (36%).

“Middle-income Canadians who feel left behind when it comes to financial education and guidance are increasingly turning to life insurance companies and the individuals that represent them for advice,” said Gary Edwards, Ph.D., co-founder and research lead of Golfdale Consulting. “Given that we know the trust factor is there, the focus should now be on ensuring access remains in place, so financial guidance is in reach for anyone that needs it.”

Key Findings from Primerica’s Canadian Financial Security Monitor™

• Most say financial education is insufficient. A sizeable majority (68%) of middle-income Canadians feel schools did not prepare them well for managing their personal finances in adulthood, indicating a substantial gap in financial education.
• Personal finances viewed more positively than economic health of province. Nearly two-thirds (65%) of middle-income Canadians rate their personal finances as good or excellent while three-quarters (75%) view the economic health of their province as not good or poor.
• More families are saving for the future. A majority have a savings account (72%) or a self-funded, tax-free savings account (58%), an increase over previous surveys. In addition, nearly half (47%) have a self-funded, registered retirement account.
• Emergency savings lacking. More than one-third (35%) of middle-income Canadians do not have an emergency fund. While this marks a slight improvement over previous years, it also highlights an ongoing financial vulnerability.
• Inflation and health are top worries. The survey identifies inflation and health-related expenses, both at 61%, as the primary concerns among middle-income Canadians. Additional financial pressures come from grocery costs (39%) and challenges in saving for retirement (36%).
• Financial advice is seen as essential. Most middle-income Canadians (72%) agree that everyone should have access to a financial professional. However, just two-fifths (38%) believe they can afford it.

About Primerica’s Canadian Financial Security Monitor™ (FSM™)

Since 2020, the Canadian Financial Security Monitor™ has surveyed middle-income households across Canada to gain a clear picture of their financial situation. Using Dynamic Online Sampling, Change Research polled 833 adults nationwide in Canada, from April 10-17, 2024. Post-stratification weights were made on gender, age and province/territory region to reflect the population of these adults based on the 2016 Canadian Census. Polling was done in both English and French. The margin of error is +/-3.4 percentage points.

About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial products and services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured approximately 5.7 million lives and had approximately 2.9 million client investment accounts on December 31, 2023.[1] Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in the United States and Canada in 2023. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

¹ Numbers reflect the combined totals or daily average, as indicated above, as of, or for the year indicated above, for the following affiliated companies: Life Insurance: National Benefit Life Insurance Company (Home Office: Long Island City, NY) in New York; Primerica Life Insurance Company (Executive Offices: Duluth, GA) in all other U.S. jurisdictions; Primerica Life Insurance Company of Canada (Head Office: Mississauga, ON) in Canada. Investments: In the United States, securities are offered by PFS Investments Inc. (PFSI), 1 Primerica Parkway, Duluth, Georgia 30099-0001; In Canada, mutual funds are offered by PFSL Investments Canada Ltd., mutual fund dealer, and segregated funds are offered by Primerica Life Insurance Company of Canada, Head Office: Mississauga, Ontario. Each company is responsible for its own financial obligations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240513333683/en/

Investor Contact:

Nicole Russell

470-564-6663

Nicole.Russell@primerica.com

Media Contact:

Susan Chana

404-229-8302

Susan.Chana@Primerica.com

Source: Primerica, Inc.

FAQ

What percentage of middle-income Canadians believe their education failed to prepare them for managing finances?

68% of middle-income Canadians believe their education did not prepare them for managing finances.

What financial topics do most Canadians feel were inadequately covered in school?

Most Canadians feel schools inadequately covered understanding taxes (85%), managing loans (81%), and setting budgets (77%).

How many middle-income Canadians have a savings account?

72% of middle-income Canadians have a savings account.

What is the top concern for middle-income Canadians according to the survey?

The top concerns for middle-income Canadians are inflation and health-related expenses, each cited by 61% of respondents.

How do middle-income Canadians view their personal finances versus the economic health of their province?

65% rate their personal finances positively, while 75% view their province's economic health as poor.

What percentage of middle-income Canadians believe everyone should have access to a financial professional?

72% of middle-income Canadians believe everyone should have access to a financial professional.

How many middle-income Canadians think they can afford a financial professional?

Only 38% of middle-income Canadians think they can afford a financial professional.