Are you a whizz when it comes to working out percentages or how much tip to pay in a restaurant, or do you struggle with even basic maths? A global study has found that the UK ranks sixth out of 143 countries when it comes to financial literacy – putting it well ahead of the US, Switzerland and France.
However, the world beaters on the money and numbers front, and the most likely to understand concepts such as compound interest and the effects of inflation, are the Scandinavians.
Standard & Poor’s, the credit ratings agency, interviewed more than 150,000 adults around the world and used five questions to test their knowledge of four basic financial concepts: numeracy, interest compounding, inflation and risk diversification.
The researchers said that based on the answers, they had reached the “sobering” conclusion that worldwide, only one in three adults were financially literate.
On average, 52% of European adults are financially literate, with the figure rising to 67% in the UK. However, three Scandinavian countries – Denmark, Norway and Sweden – topped the table, each scoring 71%. Close behind were Israel and Canada, both of which scored 68%.
Germany managed 66%, while the figures for Australia and the US were 64% and 57% respectively. Ireland scored 55% and France 52%.
At the bottom of the table were Yemen (13%), Albania and Afghanistan (both 14%), and Somalia and Angola (both 15%).
S&P said that when it came to Europe, many of the southern countries did badly: for example, Portugal’s financial literacy rate was 26%, which wa the same as that for Rwanda and Chad. Italy’s was 37%, which is lower than Mongolia (41%) and Kazakhstan (40%).
Are you a maths whizz or financially illiterate?
Standard & Poor’s said a person is defined as financially literate when they correctly answer questions from at least three out of the four financial concepts below. Take the test:
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