Ireland’s financial literacy lags its peers according to new study
Daragh Cassidy
Daragh Cassidy
Head Writer

A new study from Bank of Ireland reveals Irish people's grasp of financial matters lags behind our peers.

A new financial literacy index commissioned by Bank of Ireland and conducted by Red C has revealed that many people in Ireland struggle with financial matters. 

According to the index, Irish people have an average financial literacy score of 54%.

But compared to the Global S&P Financial Literacy survey, which was carried out in 2015 and which is the most recent comparable global study, Ireland’s score lags behind our peers including Australia at 64%, Germany at 66% and the UK on 67%.

The index also reveals a striking difference across gender and age, with women scoring almost 10% lower than men for example. 

The Financial Literacy Index also found that very few people (28%) feel knowledgeable about financial matters. And while one third claim to know about mortgages, only one fifth say they are familiar with investments and pensions. Encouragingly, more than half (58%) said that they review their finances personally each month.

The study comprised of 24 questions over nine topics among a nationally representative sample of over 1,000 adults living in the Republic of Ireland. 

Key findings

  • There is a striking difference across demographics – those aged 18-34 score lowest at 48% with the highest score of 58% achieved by the over 65s.
  • Socio-economic factors also play a part with the highest overall average score of 60% among ABC1s, compared to 49% among C2DEs. 
  • Financial literacy is a gender issue too. Women in Ireland score almost 10% lower than men (49% answered correctly by women versus 58% by men).
  • 26% of those who took part got fewer than ten questions correct and would be considered to have very poor financial literacy. 
  • Knowledge of savings and tax reliefs was lowest, with only 37% of answers scored correctly on savings and 42% on tax relief.
  • All groups do poorly on ways to reduce credit card interest with just 19% able to identify all ways to avoid interest on credit cards.
  • All groups are challenged by the concept of compound interest with just 44% answering correctly.

    Speaking about the results, Dawn Bailey, Head of Financial Wellbeing, 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. 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."

    The bank says it will continue to invest in its financial literacy programmes in schools including its Money Smarts programme for secondary school students and its Talking Cents resources for primary schools.

    Since 2017, 418,000 students across Irish primary and secondary schools have taken part in Bank of Ireland’s financial literacy programmes. And the bank will launch a major national advertising campaign this week to highlight the financial literacy supports available to teachers and parents.

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