Irish fail the financial buzzword test

YOUNG Irish adults are not as familiar with key banking terms as their European counterparts.

A survey conducted by National Irish Bank among 18 and 19-year-olds and their parents in Ireland, Denmark, Finland, Northern Ireland, Norway and Sweden found Ireland fared the worst in the levels of awareness of basic financial and banking terms such as APR (annual percentage rate).

Eight out of 10 young Irish adults and 65% of their parents did not understand what “APR” meant, compared to 50% in Finland.

Just two out of five Irish young adults understand the term disposable income compared to over half in Finland.

Also over three quarters of Irish parents were not able to define the term.

The survey found that 69% of young people could not identify the cheapest loan offer out of a selection of three different scenarios, compared with just 47% in Denmark.

National Irish Bank’s communications manager, Caroline Douglas said: “It’s worrying that young Irish adults have such a poor understanding of financial and banking terms compared to their European counterparts.

“It’s clear that they, and in many cases their parents, do have some difficulty with financial and banking terminology, as well as budgetary matters, and this knowledge gap needs to be bridged.”

The research also showed Irish people, who have an overdraft facility said their account is in credit for most of the month.

Almost three quarters said they don’t like borrowing money and 83% either know exactly or to a greater extent how much is in their account and how much they need for their expenses each month.

Ms Douglas said: “The research shows that there is a gap in people’s financial knowledge. We believe its important to bridge this gap from an early age.

“Of course, parents and the education system have a role to play, and we’re working closing with key stakeholders in these areas to ensure that the initiatives we launch over the coming months support the systems that are already in place.”