Mind the Financial Literacy Gap Canada

I often wonder if people are more financially literate today given the amount of information available online. I presumed that literacy would be going up meaningfully, especially with AI as the latest and greatest tool to come along. To my surprise, the most recent Canadian survey on financial literacy shows this isn’t the case. So where are the financial literacy gaps? Let’s look at what the survey says.

The Survey

The 2026 Canadian survey is The Retirement and Savings Institute (RSI) Index done by HEC Montréal. The ⁠RSI measures Canadians’ knowledge of their retirement income system as well as their general financial literacy. The 2026 survey combines the responses of 1,344 Canadians aged 35 to 54 to 30 questions. The general financial knowledge questions cover interest compounding, inflation and risk diversification. RRSPs, TFSAs, and employer defined benefit/contribution pension plans are covered as well. The final questions cover government pensions and supplements such as the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), Old Age Security (OAS), and the Guaranteed Income Supplement (GIS).

In addition to the 35-54 age group, 1,656 people aged 55 and older were surveyed to compare the results between the age groups. To make the results of the surveys representative of the Canadian population, respondents’ answers were weighted using the 2021 Census data.

The Gaps In The Overall Results

As shown in Chart 1 below, only 35.7% of respondents aged 35 to 54 answered all the questions correctly, which is essentially unchanged from the previous survey in 2024 and down from the peak in the 2020 survey. Clearly the financial literacy gap is not improving. Interestingly, 39.5% of the multiple-choice answers to the survey were “I don’t know”.

Chart 1

Some of the findings on the knowledge gaps are unsurprising: financial literacy increases with age; higher educational achievement is associated with a higher score; higher earning individuals tend to know the system better and score higher; and those handling the household finances score better. What was surprising to me was that there is a small but persistently higher score for men (37.6%) compared to women (33.9%).

The Gaps In The Section Results

Chart 2 shows the scores by section. On the plus side, general financial knowledge questions had a score of just over 60%. However, there is a large gap between the general financial knowledge score and the employer plans knowledge and OAS/GIS knowledge scores.

Chart 2

Why is there such a large gap between the highest and the lowest sections? Let’s look at the lowest scoring section on employer defined benefit (DB) and defined contribution (DC) plans to see what is behind the low score. All age groups in the survey had difficulty differentiating between the two types of plans. In addition, lower income people do not know employer plans well, and respondents who have DB or DC plans have better knowledge than those who don’t have either plan.

Now let’s take a deeper dive into the next lowest scoring section on OAS/GIS. The age of the respondent makes a difference, with older people scoring higher. Once again, lower income individuals do not know OAS/GIS as well, which is troubling considering the benefits target lower income seniors. One big caveat for me on this section’ score is that a few of the questions seemed too technical, such as the taxability of these benefits.

There is an encouraging sign in the CPP/QPP section. The score for knowing you get a larger benefit for deferring your CPP/QPP has increased by almost 10% since the 2022 survey to 45%.

The Gaps In the 35-54 and 55+ Age Group Results

The 55+ age group scored better on the overall survey at 52.6% (and on all the survey sections) compared to the 35-54 age group at 35.7%. Looking only at retirees, they do best with a score of 54.7%. It shouldn’t come as a shock that the higher scores from the 55+ age group and retirees primarily came from being much more knowledgeable about CPP/QPP, OAS/GIS, and RRSPs/TFSAs than the 35-54 age group.

The Wrap On The Gaps

Canadians performed best when answering questions on general financial knowledge (risk and return) but were weak when it came to their knowledge of retirement and pension related programs. The survey also highlighted that lower income Canadians, younger adults, and less educated adults had lower financial literacy scores. This is concerning as these groups would benefit the most from higher financial literacy. And even though scores increase with age and income, the highest scoring groups on the overall survey were only in the 40% correct range.

Then there is the small but persistent gap in men’s and women’s scores. Research by HEC and others such as the Canadian Labour Congress provide several reasons why this gap remains. With regards to people running household finances scoring higher on the survey, men are still more likely than women in couples to take ownership of long-term financial planning rather than day to day budgeting. Earning more is also correlated with higher scores, and women in general earn less over their careers. This can be due to reducing hours worked or taking career breaks caring for children and aging parents. This also results in them having less exposure over their career to employer pension plans.

The gender wage gap[1] also means women have less to save and invest and may leave them with less exposure to financial products. Finally, there is research[2] that shows that women are more likely than men to answer “I don’t know” when they are not sure about the right answer rather than choose the answer they suspect may be correct. Women answered “I don’t know” to 42.3% of the survey questions compared to 36.7% for men.

Closing The Gaps

Given the RSI survey results, Canadians need more knowledge of financial risk/reward and the retirement system. It is concerning that the scores of the youngest age groups are lower than the older ones, as planning financial and retirement goals early gives you the best chance of achieving them. In addition to initiatives to boost financial literacy in schools, I think that a financial plan should be done for anyone who has a bank or investment account or who deals with a financial advisor. Those plans and the concepts and financial and retirement tools in them should be reviewed annually.

Everyone has financial goals in life and needs sufficient knowledge and a solid plan to reach them. The investment industry must continue its shift from being focused on products to financial plans that drive long-term asset allocations.

Invest Wisely,

Dave Schaffner, CFA

Principal, Wayfairer Capital Management Ltd.

[1] Among workers aged 25 to 54 in Canada, women earned, on average, 89 cents for every dollar earned by men in 2025, up from 81 cents in 1997. See Women’s History Month… By the numbers

[2] Fonseca, R., & Lord, S. (2019). Canadian gender gap in financial literacy: Confidence matters. CIRANO Working Papers 34. Retrieved from https://economie.esg.uqam.ca/wp-content/uploads/sites/54/2020/01/2019-12_docdt_eco.compressed.pdf