Financial Wellbeing and Literacy Disparities
The Competition and Consumer Protection Commission (CCPC) in collaboration with Indecon Economic Consultants, has released a comprehensive report titled "Exploring Financial Wellbeing and Literacy Disparities across Population Groups in Ireland." This report delves into the financial wellbeing and literacy levels among various demographic groups within the country, building upon findings from a 2023 national survey conducted by Ipsos MRBI.
Key Findings from Phase I:
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Financial Satisfaction: 58% of respondents expressed satisfaction with their current financial situation, yet approximately 14% acknowledged having excessive debt.
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Financial Stability: One-third of participants reported merely getting by financially, and about 12% indicated they could sustain their expenses for only a month or less if faced with an income shock.
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Savings Behavior: A significant 86% of households engaged in saving activities, with men more inclined toward higher-risk savings options.
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Pension Access: While 77% had access to the State Pension, 9% relied solely on it or lacked any pension arrangement.
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Financial Decision-Making: Notably, 25% of respondents did not compare options before purchasing financial products.
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Digital Engagement: The majority, including older adults, utilised the internet for banking and financial planning.
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Financial Fraud Exposure: One in five individuals had experienced some form of financial fraud.
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Financial Literacy Levels: Overall, Ireland demonstrated high financial literacy, though disparities persisted among specific groups.
Insights from Phase II:
The second phase of the study employed quantitative analyses to examine differences and similarities between specific demographic groups. Utilising the OECD's standardised toolkit for assessing financial literacy and wellbeing, the report offers nuanced insights into the financial behaviors, knowledge, and attitudes prevalent across Ireland.
International Context:
When compared to OECD and EU averages, Ireland's financial literacy scores are commendable. However, the report emphasises the importance of targeted policy interventions to address gaps identified among certain population groups, ensuring equitable financial wellbeing and literacy nationwide.
The findings underscore the necessity for tailored financial education programs and policy measures aimed at enhancing financial literacy and wellbeing, particularly among vulnerable groups. The CCPC and Indecon recommend ongoing monitoring and targeted initiatives to bridge the identified disparities, fostering a more financially informed and resilient population.
Policy Proposals
- Introduce financial literacy education to the primary and secondary school curricula
- Track levels of financial exclusion and build and monitor policies and practices aimed at eliminating it in its entirety.