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Saving for a Brighter Future
Low-income Canadians earn $8 million in assets
As of June 2004, 
participants had saved
over $3 million, securing approximately $8 million in matched credits.
This asset-building strategy for low-income individuals is the largest demonstration
of Individual Development Accounts for learning using rigorous research
methods anywhere in the world.
is a unique research project that offers
financial incentives to help low-income people build assets and improve their
long-term economic prospects.
Today, there are 4,827 participants across Canada—1,765
registered through FSA Toronto alone.
"Low-income people don’t have disposable income"says Penny Bethke, learn$ave Manager at Family Service Association of Toronto.
"This project shows that even limited savings can have a big payoff."
Led by Social Enterprise Development Innovations (SEDI) and funded by the
federal Department of Human Resources and Skills Development Canada, is
run in partnership with local community service agencies in 10 communities
across Canada including Toronto.
The project gives participants the opportunity to earn three dollars in matching credits for every dollar saved, to a total of $6,000 in savings and credits.
The funds are held in a special bank account - Individual Development Account (IDA) - and can only be withdrawn to pay for education, skills training or to start a new small business.
In addition to the matching credits, part of the project involves providing randomly selected participants with financial training to help them recognize saving opportunities, create a budget and plan for the future.
"We found a significant number of immigrants applying to the project. To me, this speaks to the increasing racialization of poverty in Toronto.Penny Bethke
It also reflects the labour market today—the bar is so much higher that just a general university degree isn’t enough."
The first report of this project, Helping People Help Themselves: An Early Look at learn$ave was released in May 2004 by SRDC. It found that participants are well-educated and highly motivated to achieve their career goals.
Nearly all participants are high school graduates (94 per cent) and nearly half possess a university degree. Two-thirds of the participants are employed yet their average annual income was only $11,268. Many are recent immigrants—48 per cent arrived in Canada in 1998 or later.
The project will continue until 2009,
because the results of an Individual Development Account project take many
years to materialize. While it is still early in the study, learn$ave has
demonstrated that, given the incentive, low-income Canadians can
accumulate savings that are substantial considering their personal circumstances. “It
makes for very rewarding work,”
says Penny Bethke, FSA manager.
