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Europeans and financial literacy: when will the penny drop?

Financial and risk literacy are essential life skills, but a new survey reveals many Europeans still lack basic knowledge

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Europeans and financial literacy: when will the penny drop?

Financial and risk literacy are essential life skills, but a new survey reveals many Europeans still lack basic knowledge

European financial literacy snapshot findings

  • Ten years after the first financial literacy surveys, little has improved
  • Austria, Germany and Switzerland top the ranking in financial and risk literacy while France and Portugal dwell at the bottom
  • Risk-related concepts are the most difficult to grasp in all countries and the least understood
  • Longevity risk is the easiest to grasp: elderly respondents performed better than younger ones yet 40% still gave a wrong answer
  • Diversification risk is the most difficult to understand: only 28% of respondents Europe-wide could identify the most suitable financial product
  • Women still lag behind men, particularly on risk-related questions
  • A university degree does not automatically make someone a financial expert – although it helps
  • Millennials (under 35) have the lowest financial and risk literacy, though this may change later in life
  • Overall, people make poor financial decisions when set in real-life context
  • People with a good grasp of financial and risk concepts are twice as likely as those without to make better financial decisions

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