Financial literacy levels in Ireland appear to lag behind those in peer countries, according to a new survey carried out for Bank of Ireland. The survey of more than 1,000 adults here, conducted by Red C, found that respondents answered just over half the test questions correctly, resulting in a financial literacy score of 54 per cent.
Irish people display significantly less understanding of how their personal finances work than their peers in other countries including the UK, Australia and Germany, the survey found. The index also reveals a striking difference across gender and age, with women scoring lower than men and younger people performing poorly when compared with older people.
On average, Irish people scored just 54 per cent in the financial literacy test commissioned by Bank of Ireland and conducted by Red C.
That compares to scores of 64 per cent among Australians, 66 per cent among Germans and 67 per cent among British people who took part in a similar survey carried out by Global S&P in 2015, which Bank of Ireland said was the most recent closely comparable global study.
The financial literacy index survey also revealed significant differences across gender and age, with women scoring almost 10 per cent lower than men. Overall, 18-34 year olds scored lowest (48 per cent) with the highest score for over-65s (58 per cent).
It also found that very few (28 per cent) feel knowledgeable about financial matters. While one-third claim to know about mortgages, only one-fifth say they are familiar with investments and pensions.
Some 26 per cent of respondents got less than 10 questions correct and would be considered to have “very poor financial literacy”.
The highest scores were achieved on basic numerical tests, where 69 per cent were answered correctly, and understanding of the price of items, with 64 per cent answered correctly. Knowledge of savings and tax reliefs was lowest, with 37 per cent of answers scored correctly on savings and 42 per cent on tax relief.
All groups do poorly on ways to reduce credit card interest with just 19 per cent able to identify all ways to avoid interest on credit cards.
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Dawn Bailey, head of financial wellbeing at Bank of Ireland, said: “The right financial decisions can have a critical impact on our lives. If we are more financially knowledgeable and literate, we are better placed to make sound choices and improve our financial wellbeing.
“Good financial habits, like any positive habits, begin at an early age. Our schools are ideally placed to provide a head start in developing good financial habits for life, which is why Bank of Ireland has developed a comprehensive range of supports for teachers and parents,” she said.
“However, while we can play a strong role in helping improve financial literacy, to really move the dial requires a whole-of-society response. Bank of Ireland is engaging with other stakeholders to promote collaboration on this important issue.”
