Women, lone parents and unemployed people have the lowest levels of financial literacy in Ireland according to a new report highlighting the need for improvement through educational initiatives.
Men have higher average levels of financial understanding, and improving that of women is considered important in helping to close the “wellbeing gap”.
The report – Exploring Financial Wellbeing and Literacy Disparities across Population Groups in Ireland – is the second piece of research in the area, published on Wednesday by the Competition and Consumer Protection Commission (CCPC).
It is based on a national survey of 1,505 adults undertaken by Ipsos MRBI in 2023.
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It stresses that while riskier, more complex products such as crypto currencies have become increasingly accessible, the majority of those surveyed showed a limited understanding of how such products work.
This week the value of global crypto surpassed $3 trillion for the first time in three years with demand surging in the wake of Donald Trump’s election and expectations he will prove positive for the market.
According to the CCPC, a lack of consumer knowledge was also apparent for more traditional savings, investment and retirement products. Less than 40 per cent of respondents who own such products understood compound interest.
The findings, it said, indicate a necessity for focused educational initiatives given that higher literacy is strongly linked with increased financial wellbeing across all demographic groups.
“Education, employment and gender can significantly affect people’s financial wellbeing; awareness of these disparities is crucial for developing targeted and more impactful policies,” said Kevin O’Brien, commission member of the CCPC.
“More and better financial education is vital, particularly in light of the uptick in fraud and scams, and the accessibility of complex financial products through fintech. Knowledge is power and financial education is protection.”
He stressed that the publication of Ireland’s first National Financial Literacy Strategy should be a priority for the next government and an important step in improving knowledge.
Financial know-how is found to be important in understanding products such as Buy Now Pay Later (BNPL) as well as the availability of price comparison services that allow people to effectively shop around.
However, the report also notes that while financial literacy can be beneficial, “it is not a silver bullet for improving financial wellbeing”.
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Those prone to poorer financial circumstances typically include low earners, the unemployed and families with children.
The initial phase of research published last year found one in eight people can only cover their costs for a month or less in the event of income shock.
While the majority of households (86 per cent) save money in deposit or savings accounts, men were more likely to engage in higher-risk saving such as the purchase of stocks and shares, or investing in cryptoassets.
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