Financial literacy lacking: survey

ONE in three Irish adults do not know the definition of one of the most common financial terms, APR, according to research commissioned by the National Adult Literacy Agency (NALA).

Furthermore, over half of middle-income respondents, selected the incorrect explanation of the term.

APR or the Annual Percentage Rate is the interest rate charge on a loan.

These findings form part of Ireland’s first national independent research into the issue of financial literacy.

Research of international markets shows that Ireland falls behind its international peers when it comes to financial literacy awareness and initiatives.

The survey revealed that the problem of low financial literacy is not confined to those with literacy and numeracy difficulties but exists in all income levels.

It also highlighted that financial literacy concerns are a major barrier for people looking to fully access services from the financial services industry.

The research found that one of the biggest challenges for financial institutions is addressing the issue of consumer trust.

Confusion over charges and Government levies as well as misunderstanding over how loan rates are calculated, was a recurring concern among adult literacy learners interviewed as part of the research process.

Consumers stated that they are often too intimidated to ask for help and many learners preferred the simplicity of dealing with moneylenders who deal in amounts per hundred rather than interest rates and APR.