Only 18% of European Union citizens have a high level of financial literacy; 64% have a medium level and the remaining 18% have a low level. These are the results of a Eurobarometer survey on financial literacy in the European Union, released in July by the European Commission, with fieldwork carried out between March and April of this year.

This survey tested the financial knowledge and financial behaviour (interpreted together as financial literacy) of European Union citizens, revealing significant differences between the various Member States and between specific groups of citizens.

With respect to countries, only four (Netherlands, Sweden, Denmark and Slovenia) have more than 25% of the population with a high level of financial literacy.

As regards groups of citizens, women, young people, people with lower incomes and people with a lower level of education tend to have less financial literacy.

The results also reveal that only about a quarter of respondents were able to correctly answer at least four of the five questions about financial knowledge. Approximately half answered only two or three questions correctly. A quarter found the questions particularly challenging, either not answering any question correctly or only answering one in five questions correctly. In the area of financial knowledge, the countries with the best performance were the Netherlands, Denmark, Finland and Estonia. Portugal ranks second to last.

The majority of respondents (65%) demonstrated that they understood the impact of inflation and its consequences in terms of purchasing power. However, only 45% of respondents revealed that they understood how compound interest works, despite the importance of this concept for personal financial management and long-term savings.

In terms of financial behaviour, approximately nine out of ten respondents agree that they consider whether they can afford something before they buy it. Furthermore, seven out of ten agree that they set long-term financial goals and strive to achieve them.

As for digital financial services, approximately three-quarters of respondents across the EU say they are comfortable using them (e.g. online banking or mobile payments).

Only around one in three Europeans trust the investment advice they receive. However, the level of trust in this type of advice varies considerably between Member States: citizens of Finland trust it the most (59%) and citizens of Cyprus trust it the least (20%).

Across the EU, 46% of respondents stated that they have (or have had in the past two years) non-life insurance, such as household insurance or motor insurance. Only 31% reported having (or having had in the past two years) life insurance. Furthermore, one in five respondents stated that they have (or have had in the past two years) a mortgage or home loan and 14% responded the same for a consumer loan. 6% responded that they own or have already owned (in the past 2 years) crypto-currencies.

When asked how long they would be able to continue to cover their living expenses, without borrowing money or moving house, if they lost their main source of income, one third of respondents (33%) answered six months or more. 18% reported at least three months (but not six months). However, 16% of respondents said they did not have emergency savings.

Finally, the survey also revealed that across the EU the majority of respondents feel “not too confident” (32%) or “not confident at all” (22%) that they will have enough money to live comfortably throughout their retirement years.

The summary with the survey results is available at:

https://europa.eu/eurobarometer/surveys/detail/2953