4 in 10 adults in UK, Canada, Spain & US Are Financially Illiterate

a year ago

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How good are you at doing sums? Let’s see if you can solve the following: 1 liter of cola is $3.15, how much do you have to pay for a ⅓ of a liter?

Simple as it is, the majority of adults across the globe find themselves unable to solve this task correctly, even if they’re allowed to use a calculator. The correct answer is $1.05 if you’re still wondering.

The research data obtained from the Organisation for Economic Cooperation and Development (OECD) Programme for International Assessment of Adult Competencies (PIAAC) looks shocking. Adults from 31 countries were offered to answer 4 simple financial questions.

The questionnaire included the first question as well as the following:

While paying a visit to the grocery store, you buy 4 types of tea packs: chamomile tea ($4.60), green tea ($4.15), black tea ($3.35) and lemon tea ($1.80). Suppose, you paid for all 4 packs with a $20 bill, how much change would you get?

The results by countries turned out quite surprising:

  • In Lithuania, Austria, and Slovakia, adults were the most successful. Still, 1 in 4 adults in these countries failed to give the correct answer.
  • In England, Canada, Spain, and the US, a staggering 4 in 10 adults were unable to make a simple calculation. Even using a calculator!
  • In Chile, Turkey, and South Korea less than 50% of adults failed to give the right answer.

What Is The Meaning of the Research?

The research has uncovered significant disparities in financial literacy skills between different demographic groups.

  • In most countries, men performed slightly better than women.
  • As for the age distribution, the 25- to 34-year-olds performed better than respondents aged over 55s.
  • In many countries, adults with a secondary school level of education got less than 50% questions correct. In Canada and United States, the indicator was lower - around 25%.  

Unfortunate as it is, adults are ill-prepared to make crucial financial decisions. This situation poses a question of how important financial literacy actually is. Teaching the basics of financial literacy at school could help young people make complex financial decisions in the future.

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Any questions or propositions?