Adults in many countries lack financial knowledge, and Cyprus is no exception, a new study by the University of Cambridge and University College London has found.
“The ability to solve financial problems is critical to the well-being of adults across the world since every day transactions, such as saving, spending and interacting with banks, require significant understanding of key financial concepts,” said a statement from the researchers who undertook the study.
The figures were taken from a Programme for the International Assessment of Adult Competencies (PIAAC) study where adults aged from 16 to 65 from 31 countries around the world were asked to complete a set of basic financial tasks.
Using the argument that asking fewer questions has the advantage of brevity, is cost effective to implement and form a useful basis for broad comparison across countries, the authors opted to ask four questions.
“Each of these questions required participants to use basic numeracy skills to solve an everyday financial problem, such as working out the change they would expect to receive when shopping,” the statement said.
The average response rate to the study was highest in Turkey, at 80 per cent, and lowest in Sweden, at 45 per cent. Cyprus ranked third, with 73 per cent responding.
While adults in Estonia, Finland and Japan performed well across all four tasks, those in Turkey, Chile, Israel, Italy, Spain and England had among the weakest financial skills. Cyprus did well in some respects, with one answer correctly answered by 73 per cent, but two by just 37 per cent.
About a quarter of participants in all countries, including Cyprus, could not work out how much change they should receive from a shop when buying a handful of goods, and this increased to about a third in Spain, England and Italy.
About one in three adults 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. Cyprus did slightly better than average on this question with 69 per cent of answers being correct.
About half of the respondents could not read a simple financial line graph – the type often used to convey key information about the economy and financial products – and this rose to three-quarters in Greece, Chile, Italy and Turkey
Most struggled to calculate discounts involving more complex calculations.
“Our key conclusion is that, in some countries, policy intervention will be needed to ensure adults have the basic skills they need to navigate their way through an increasingly complex financial world,” the report said.
More results show there is a slight tendency for women to be better at performing simple everyday financial tasks than men, especially when calculating the amount of change people should expect after buying several items. For this, women from Poland were seven per cent more likely to find the correct answer, and women from Cyprus five per cent more likely, putting the island fourth in the rankings. In Turkey men were far more likely to find the right answer.