Irish adults that can’t add

A third of Irish adults struggle to work out how much change they should get in a shop and two-thirds cannot read a simple financial line graph, according to a leading financial skills study.

Financial education options available from, the financial education service

The study, from Cambridge University and University College London, which was published in March found “striking weaknesses” in adults’ financial literacy skills across many countries but adults here in Ireland fared especially poorly in all key categories.

Financial literacy is broadly defined as the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. MoneyWhizz has identified six key financial pillars; Earning & Income, Credit & Debt, Saving & Spending, Protection, Investing and Financial Decision-making.

According to the UK report, researchers analysed more than 100,000 results from 16- to 65-year-olds from 31 countries (listed below) who had completed the Programme for International Assessment of Adult Competencies (PIAAC) test in 2011.

As part of this test, adults were asked four relatively simple money-related questions that could be expected as part of day-to-day living.

The UK researchers’ analysis of these results said: “A substantial number of people lack the basic skills that are needed to solve everyday financial tasks.”

The study, The financial skills of adults across the world, finds of adults across the 31 countries, Irish adults are especially poor:

  • About a third of Irish adults could not work out how much change they should receive from a shop when buying a handful of goods.
  • About four-in-ten adults here struggled to work out the price they had to pay for a product when they were given a per unit cost, for example per litre or per kilo.
  • Roughly two-thirds could not read a simple financial line graph – the type often used to convey key information about pensions, investments and the economy – this placed Ireland near the bottom of the global survey.
  • Most struggled to calculate discounts involving more complex calculations – in the example, the price of season tickets to sporting events.

Adults in Estonia, Finland and Japan performed well across all four tasks, those in Ireland, Turkey, Chile, Israel, Italy, Spain and England & Northern Ireland had among the weakest financial skills.

Examples of the sorts of questions asked

  1. If you bought four packs of tea: chamomile ($4.60), green ($4.15), black ($3.35) and lemon ($1.80) with a $20 note, how much change would you get?
  2. If a litre of cola costs $3.15, how much will you pay for a third of a litre?
  3. Explain the information presented in a simple financial line graph.
  4. If a football club offers the same discount for all season tickets – Main Stand – $50 for single entry, $300 for a season; Stand 2 – $35 for single entry, $210 for a season; Stand 3 – $25 for single entry, $150 for a season – what would the price be for a Stand 4 season ticket, where a single entry costs $21?

The answers are $6.10, $1.05 and $126 respectively.

With more and more Irish adults living longer, the long-term need to plan one’s financial well-being from an early age is more important than ever. This is due to the combined impact of changing employer pension arrangements which have shifted from so-called ‘final salary’ or Defined Benefit pensions to Defined Contribution pensions. Under the Defined Contribution pension option, all of the investment risk is shifted to the individual. Also, many states, including Ireland have increased the qualifying age for one to receive the State Contributory Pension by several years. This has resulted in loss of income for millions of future retirees.

Consumers today have far more financial responsibility for their long-term financial well-being. Yet, few have the necessary skills to make informed financial decisions. It is important that consumers  with relevant, meaningful and timely financial education on key concepts, including investing, time-value of money, compounding and tax-relief so they are better prepared for their future financial needs” said Mr. Frank Conway, Founder of MoneyWhizz, which works with primary and secondary schools as well as leading employers across Ireland in the delivery and development of personal financial skills.

The countries covered by the research paper are:

  • Turkey
  • Korea
  • Cyprus
  • Ireland
  • United States
  • France
  • Czech Republic
  • Finland
  • Slovakia
  • Chile
  • Estonia
  • New Zealand
  • Singapore
  • Slovenia
  • Belgium
  • Norway
  • Israel
  • Canada
  • England and Northern Ireland (counted as one for the report)
  • Poland
  • Germany
  • Italy
  • Lithuania
  • Austria
  • Greece
  • Russia

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