Lack of Financial Education no Barrier to Money-wise Brits

News provided by

ING Direct

20 Jul, 2012, 15:15 GMT

LONDON, July 20, 2012 /PRNewswire/ --

  • Brits claim to have the lowest level of formal financial education in Europe
  • Yet we're more financially savvy than the French, German and Spanish
  • Though UK citizens are least likely to switch banks, in spite of their financial know-how

When it comes to having financially savvy citizens, Britain is ranked among the best in Europe.

This is despite the fact that Britain is, according to new research, the least financially educated country in Europe, with more than half of the population (52%) claiming to have never received any formal financial education.

Savings and mortgage provider ING Direct put more than 11,000 Europeans through a series of 'financial competence' tests to measure their understanding of key financial issues. Participants were asked to answer a series of questions ranging from how interest rates worked, how they thought rising inflation rates would affect them and how monthly mortgage payments were calculated.  

Britons came out with a better score when it came to financial awareness than their German, French and Spanish counterparts, with three in 10 (31%) passing the financial test to stand 4th out of the 11 European countries tested.

And it seems that much of this financial knowledge is self-taught, with more than a third (40%) of Britons who have had some financial education saying they used the internet and media sources to teach themselves about important financial issues.

Yet while the UK boasts some of the most financially savvy citizens in Europe, this does not translate when it comes to their behaviour, with Britons the least likely to shop around for financial products or switch financial provider.

ING Direct CEO Richard Doe comments:

"It's disappointing that Brits see themselves as the least well formally educated nation when it comes to financial issues, but reassuring that many have taken things into their own hands and taught themselves.

"However we were surprised to see that despite such high levels of financial knowledge, the British are the least likely to switch banks."

Percentage of respondents claiming to have never received any financial education

1. United Kingdom - 52%

2. Spain - 46%

3. Italy - 46%

4. Belgium - 46%

5. France - 42%

6. Germany - 42%

7. Turkey - 38%

8. Netherlands - 35%

9. Luxembourg - 32%

10. Austria - 31%

11. Poland - 21%

Level of Financial Competence by Country

(% who answered at least 4 of the 5 questions in the survey correctly)

1. Turkey - 37%

2. Italy - 34%

3. Belgium - 32%

4. United Kingdom - 31%

5. Germany - 29%

6. Luxembourg - 28%

7. Netherlands - 28%

8. Spain - 28%

9. France - 28%

10. Poland - 27%

11. Austria - 27%

Overview of Financial Competence Questions:

1. Understanding of how interest rates work

2. Understanding how inflation affects how much people can buy

3. Understanding how bonds work

4. Understanding how mortgages work

5. Understanding risk and return

About ING Direct:

  • ING Direct is a leading direct savings bank. It was launched in May 2003 in the UK where it currently has 1.5m customers.
  • The savings bank has won a number of accolades for its customer service, website and UK-based call centres, as well as being highly commended for most trusted savings provider at the Moneywise 'Most Trusted' 2009 Awards.
  • ING Direct is authorised and regulated by De Nederlandsche Bank (the Dutch Central Bank) and subject to limited regulation by the Financial Services Authority. Details on the extent of ING Direct's regulation by the Financial Services Authority are available on request.

ING Direct. 410 Thames Valley Park Drive, Reading, Berkshire RG6 1RH. http://www.ingdirect.co.uk

Footnotes

The ING International Survey on Financial Competence polled 11,077 people in 11 countries their levels of financial competence. In the survey, respondents were tested using questions frequently asked in assessments of financial competence. The five questions assess understanding of concepts and products that are important in managing money, including interest rates, mortgages, inflation and more.

For further information please contact:

Laura Buchan at Third City
Tel: +44(0)20-3174-1023
Email: laura@thirdcity.co.uk

Chris Blackwood at Third City
Tel: +44(0)20-3174-1023 / +44(0)779-524-7275
Email: chris@thirdcity.co.uk

Martin Rutland, ING Direct
Tel: +44(0)1189-381969/+44(0)7748-188684
Email martin.rutland@ingdirect.co.uk