Canada ranks 22nd in global financial literacy study, trail European leaders

A new international survey puts Canada well outside the top 20 for money knowledge.

Canada placed 22nd out of 27 countries in a global financial literacy study by Remitly, a digital financial services company, with Canadian respondents answering an average of 75.5% of questions correctly.

The findings, drawn from a survey of more than 5,000 people across 27 countries, tested knowledge across six core areas: interest rates, compound interest, inflation, currency conversion, investing, and cryptocurrency. The study used a framework based on the World Bank's definition of financial literacy, encompassing the knowledge, skills, attitudes, and behaviours required for sound financial decision-making.

Europe dominated the rankings. The Czech Republic placed first, with respondents answering 90.9% of questions correctly, followed by the Netherlands at 86.1% and Norway at 84.3%. Canada finished three spots above the United States, which ranked 25th with a 72% average.

What the numbers mean for advisors

For Canadian financial advisors, the data reinforces a challenge that many already navigate with clients every day. According to research previously cited by Wealth Professional, the financial literacy gap among Canadian clients is a practical constraint on the planning process, particularly when clients lack a working understanding of concepts such as compound interest or inflation.

School falling short, AI filling the gap

One of the most consistent findings across all 27 countries surveyed was dissatisfaction with school-based financial education. Overall, 70.5% of respondents said their schooling did not give them enough knowledge to manage money confidently as adults. An overwhelming 93.6% now believe financial education should be mandatory for school-age children.

In Canada, the case for stronger financial literacy education has been made with increasing urgency in recent years, with advisors identified as a key part of the solution, both through client education and through community outreach to schools and families.

Globally, self-directed learning is rising to fill the void left by formal education, with 82.9% of respondents describing themselves as largely self-taught when it comes to financial matters. More than half (51.7%) have used an AI tool such as ChatGPT for financial questions in the past year, despite recent research revealing that AI chatbots give wrong financial answers most of the time.

"What stands out the most in this study is how universal the financial education gap is," said Martyn Saville, global consumer protection manager at Remitly. "Around 70% of people say school didn't give them enough knowledge to manage their money, from everyday budgeting to bigger decisions like mortgages and investing. These are skills for life."

Saville cautioned that the growing reliance on social media personalities for financial guidance carries risks. "If you're following advice from a 'finfluencer', think about who is paying them and what qualifies them to give advice," he said. "There's a chance they might be getting paid to endorse a particular financial product - it doesn't mean it's any good or that it's suitable for your needs."

What Canadians say they're missing

When respondents globally were asked what topics were most absent from their financial education, savings and budgeting ranked highest at 75.1%, followed by taxes at 55.2%, investing at 53.9%, debit and credit at 48.4%, and mortgages at 29.7%.

Canada's 22nd-place ranking, while not at the bottom of the global table, sits well behind peer economies including Australia (11th, 79.5%), the United Kingdom (10th, 79.9%), and Japan (13th, 78.8%). For an industry that increasingly depends on informed, engaged clients to deliver long-term planning outcomes, the data suggests the education gap remains one of the most consequential issues facing advisors in Canada today.

The full study is available at remitly.com.