Log In

Reset Password

Survey shows financial literacy is lacking

Money savvy: financial literacy levels are generally low, according to an OECD survey that spanned 26 countries

April is Financial Literacy Month in the United States. Bermuda has no such designation as yet. In my view, instead of a few articles only in April, there would be more value in making this Bermuda Financial Literacy Year – a project spanning from April 2023 to March 2024.

Two reasons were prominent in the thought process that brought me to this decision, dear readers, and you don’t have to adhere to any of it given that it is informal and not supported by anyone, no agency or governing body, just me.

Reason one: I reviewed the most recent report results from the OCED-INFE Second International Survey of Adult Financial Literacy 2020 from some 26 countries and economies using the OCED/INFE toolkit measurements.

Reason two: I was comparing our island community, operations, finance, infrastructure, and economy to a real like-sized progressive community of about 60,000 in the United States, geographical location and name will remain anonymous, for various reasons. The results of my informal comparison between Bermuda and, let’s call this community “TownUSA”, are stunningly significant.

First, let’s review the OECD International Network on Financial Education (INFE) report 2020 that defines financial literacy core skills as “a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing”.

Financial education, financial consumer protection and financial inclusion are recognised at the highest policy level as three essential ingredients for the financial empowerment of individuals and the overall stability of a country’s financial system.

The opportunity to collect data using an internationally relevant instrument through a coordinated exercise further increases the value of such an assessment by enabling economies to benchmark themselves, identify common patterns and work together to find solutions for improving financial literacy and wellbeing within their respective populations.

The OECD/INFE results went beyond financial knowledge levels to aspects of financial behaviour, financial attitudes, how financially included individuals in the survey felt, insights on the individual financial resilience during times of economic and financial volatility, and identification of target groups with populations and their financial literacy scores by individuals’ characteristics (eg, age, gender, digital use and level of savings as an indicator of financial resilience).

The survey results also generated a novel financial wellbeing score that will presumably be utilised in future test results.

The key survey results was that financial literacy was low in the surveyed economies.

The maximum test score was calibrated at 21, or 100 per cent, which means that an individual has acquired a basic level of understanding of financial concepts and applies some prudent principles in their financial dealings. Average financial literacy was 12.7, or under 61 per cent, across the sampled economies.

Breaking down the scores into the elements of financial literacy, we see:

Financial knowledge: 63 per cent, and only 26 per cent of adults responded correctly to questions on simple and compound interest together – crucial concepts that affect basic money management and the accumulation of savings.

Financial behaviour: 49 to 59 per cent understand concepts include saving, planning for the long-term, keeping watch and control over one’s finances.

Financial attitude: 47 to 59 per cent indicated that even if an individual has sufficient knowledge and ability to act in a financially prudent way, their attitudes will influence their decision of whether or not to act.

Product awareness: relatively high across the 26 surveyed countries and economies – however, use is relatively low. More than 80 per cent responded that they were aware of at least five financial products, while less than 50 per cent actually purchased a financial product or service

Payment products were the most used: payment card, account or mobile payment services. The least used were insurance products.

About 23 per cent used family, friends or a network of relatives to borrow or save money, avoiding the formal financial system.

Limited financial resilience: large groups of respondents are highly susceptible to a financial shock. One third reported a financial cushion of only one week.

Widespread financial stress: 42 per cent of the adult sample noted that they worry about meeting everyday living expenses. The patterns suggest that a significant portion of the populations surveyed experience financial stress and worry about money matters persistently in their daily lives.

Low average financial wellbeing scores: on average the respondents do not consider their financial situation to contribute positively to their wellbeing, but rather to add stress and worry. The average financial wellbeing score was below 50 per cent.

Possible vulnerable groups: men appear to have statistically greater financial knowledge and financial wellbeing scores, women scored lower in some countries, higher in others. Young people, aged 18 to 29, appear to have lower financial literacy and financial attitude scores than the rest of the sample consistently and significantly. They also tend to have lower financial knowledge and less prudent financial behaviour.

Respondents who used digital devices or services score consistently and significantly higher on financial literacy, knowledge, behaviour and wellbeing.

Individuals who report availability of savings of more than three months have consistently and significantly higher scores across the board – across all economies and each of the financial scores.

Readers, to the best of your knowledge, do these results reflect yours and other Bermuda individuals and families’ current financial state of affairs?

Let me know. Send me your thoughts to info@marthamyron.com

Next, we will compare TownUSA to our Bermuda community. And what exactly does the OECD financial literacy quiz test?

At some point in the future, I will upload the actual quiz. We’ll need some anonymous volunteers to demonstrate the financially astute Bermuda islanders!

Currently, too, there are interesting aspects of the financial literacy movement and volunteers participating in delivering financial information to adults and young people in Bermuda. We’ll talk more and hopefully interview them in future articles.

If you’re interested in learning more about Bermuda’s financial history and how we got to where we are today, I would recommend that you consider reading two books in particular: Held Captive: A History of International Insurance in Bermuda by Catherine Duffy and Five Centuries, by Rosemary Jones. There numerous other books available, but these two are far reaching, and widely researched.


Global financial literacy survey, the Organisation for Economic Cooperation

Martha Harris Myron is a native Bermuda islander with US connections, and finance journalist to The Royal Gazette for 22 years. Subscribe to the Bermuda Bermy Island Finance Blog info@marthamyron.com

You must be Registered or to post comment or to vote.

Published April 01, 2023 at 8:25 am (Updated April 03, 2023 at 8:00 am)

Survey shows financial literacy is lacking

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon