Overview of ING International Survey results on financial competence

Overview of ING International Survey results on financial competence

Graphical illustrations of notable differences

1 Financial education2 Financial knowledge3 Keeping control of money4 Men and women5 Conflicts concerning money6 Financial shopping attitude7 Contact Information

INDEX Overview of ING International Survey

results on financial competence

Graphical illustrations of notable differences

AUTHORSIan Bright

Robbert Keller

CLIENTING Bank N.V.

SECTORTNS NIPO

DATE CREATEDMay 8th, 2012

Overview of ING International Survey results on financial competence

11 countries are compared in this report.

Besides this comparison, this report also offers graphs reflecting the perception and attitudes of the European consumer towards financial education and financial knowledge.

3Source: ING Research

conducted by TNS

Financial education 1

0%

10%

20%

30%

40%

50%

60%

Yes, at school Yes, I was taught by myparents or friends and

family

Yes, I am self-taught byfollowing information on theinternet, in the press or on

the TV and radio

Yes, I am self-taught byreading books

No, I have not receivedfinancial education

Austria Belgium France Germany Italy Luxembourg Netherlands Poland Spain Turkey United Kingdom

Have you ever received financial education? (choose all that apply)

Major differences between countries in the level of financial education receivedOn average, fewer than half of consumers say they have not received any financial education. Fewer than 30% of all consumers have received financial education at school.

Overview of ING International Survey results concerning financial competence | Financial education 5Source: ING Research

conducted by TNS

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

18-24 years 25-34 years 35-44 years 45-54 years 55+ years

Yes, at school

Yes, I was taught by my parents or friends andfamilyYes, I am self-taught by following information onthe internet, in the press or on the TV and radioYes, I am self-taught by reading books

No, I have not received financial education

Have you ever received financial education? (choose all that apply)

The proportion of consumers who have not received any financial education is lowest among young peopleYoung people (18-24) are the group that most often claim to have received financial education at school. Receiving financial education correlates negatively with age. Despite the fact that one out of three young people say they had financial education at school, a third still claim to have received no financial education.


conducted by TNS

Strong preference across Europe for financial education to be taught in schools

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Poland UnitedKingdom

Netherlands Austria Turkey Italy Belgium Germany Luxembourg Spain France

Do you think financial education should be taught in schools?

Percentage of those who think financial education should be taught in schools.

On average, more than four out of five consumers think that financial education should be taught in schools. France has the lowest percentage of consumers who think financial education should be taught in schools.


conducted by TNS

Financial knowledge 2

Testing financial competence (1 of 2)

The IIS asked respondents five questions to assess their understanding of concepts and products that are important in managing money.

Question 1: Understanding how interest rates work Suppose you had €100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? Possible answers: (a) Around €102 (b) Around €105 (c) Around €110 (d) Do not know (e) Prefer not to answer

Question 2: Understanding how inflation affects how much people can buy Imagine the interest rate on your savings account was 1% and inflation was 2% per year. After one year, how much would you be able to buy with the money in this account? Possible answers: (a) More than today (b) Exactly the same as today (c) Less than today (d) Do not know (e) Prefer not to answer

Question 3: Understanding how bonds work If interest rates rise, what will typically happen to bond prices ? Possible answers: (a) They will rise (b) They will fall (c) They will stay the same (d) Do not know (e) I do not know what a bond is (f) Prefer not to answer

Overview of ING International Survey results concerning financial competence | Financial knowledge 9Source: ING Research

conducted by TNS

Testing financial competence (2 of 2)

Question 4: Understanding how mortgages work A 15 year mortgage typically requires higher monthly payments than a 30 year mortgage, but the total interest paid over the life of the loan will be less. Possible answers: (a) True (b) False (c) Do not know (d) Prefer not to answer

Question 5: Understanding risk and return For the same amount of money, a person can enter one of the following lotteries. Lottery A pays a prize of $200 and the chance of winning is 5%. Lottery B pays a prize of $90,000 and the chance of winning is 0.01%. In either case, if one does not win , one does not get any money. Which lottery pays the higher average amount? Possible answers: (a) Lottery A (b) Lottery B (c) The two lotteries pay the same average amount (d) Do not know (e) Prefer not to answer

Note these questions are the same as used in several international surveys and studies that test and benchmark financial competence and financial education.


conducted by TNS

Results of financial competence test

Correct Incorrect Did not know or did not answer

Interest rate question 79% 11% 10%

Inflation question 75% 9% 16%

Bond question 25% 38% 37%*

Mortgage question 54% 24% 22%

Risk and return question 41% 27% 32%

*Includes seven percent of who replied “I do not know what a bond is.”


conducted by TNS

The overall results of the five-question financial competence test showed interest rates and inflation were widely understood. But the relationship between bonds and interest rates was only known by one-in-four respondents.

0%

5%

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40%

Correct 0 Correct 1 Correct 2 Correct 3 Correct 4 Correct 5

Austria Belgium France Germany Italy Luxembourg Netherlands Poland Spain Turkey United Kingdom

Percentages of correct answers. (Total of five questions)

Turkey performs best in the financial education test

It is remarkable that Turkey not only most frequently answered all questions correctly (also four / five answers combined), it is also the country with the highest percentage without any correct answers.

12Source: ING Research

conducted by TNS

Overview of ING International Survey results concerning financial competence | Financial knowledge

Few respondents thought that their level of financial knowledge was less than the average in their own country

0%

10%

20%

30%

40%

50%

60%

70%

Austria Belgium France Germany Italy Netherlands Poland Spain Turkey UnitedKingdom

Luxembourg

More than the average person About the same Less than the average person

How do you rate your financial knowledge compared with the average person in your country? I think I know..


conducted by TNS

Keeping control of money 3

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Austria Belgium France Germany Italy Luxembourg Netherlands Poland Spain Turkey UnitedKingdom

Very carefully. I check credit bank and card statements thoroughlyI keep moderate control by checking bank and card statements occasionallyI don't pay much attention to it

How do you keep control of your money?

In the majority of European countries people monitor their financial affairs very carefullyOn average, more than six out of ten consumers monitor their financial affairs very carefully. The only country where more people monitor their money moderately rather than carefully is Poland.

Overview of ING International Survey results concerning financial competence | Keeping control of money 15Source: ING Research

conducted by TNS

0%

10%

20%

30%

40%

50%

60%

70%

80%

18-24 years 25-34 years 35-44 years 45-54 years 55+ years

Very carefully. I check creditbank and card statementsthoroughlyI keep moderate control bychecking bank and cardstatements occasionallyI don't pay much attention to it

How do you keep control of your money?

The extent to which financial affairs are monitored increases with ageOn average, 6% of consumers claim not to pay much attention to their financial affairs. This percentage is highest among young people. More than 1 in 10 young people do not pay much attention to this at all.

Overview of ING International Survey results concerning financial competence | Keeping control of money 16Source: ING Research

conducted by TNS

Men and women 4

In the majority of countries people think that men and women are equally capable of managing money

In Poland, Spain and Turkey, people believe that women are better at managing money than men. No country claimed men to be better at managing money than women.

0%

10%

20%

30%

40%

50%

60%

70%


Men Women There is no difference

In your opinion, are men or women better at managing money?

Overview of ING International Survey results concerning financial competence | Men and Women 18Source: ING Research

conducted by TNS

Major difference in perception between men and women concerning money management

The majority of men think that men and women are equally capable of managing money. Both men and women have a preference for their own gender concerning managing money. This preference is extremely large among women, in comparison with what men indicate.

0%

10%

20%

30%

40%

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60%

Men Women

Men Women There is no difference

In your opinion, are men or women better at managing money?


conducted by TNS

In general, men scored higher than women in this survey’s test of financial competence

0%

5%

10%

15%

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25%

30%

35%

40%

Men Women

Percent of all respondents who answered at least four questions correctly


conducted by TNS

When the percentage of respondents who answered at least four questions in the test correctly is broken down by sex, we see a higher rate for men than women. This is perhaps surprising in light of the perceptions of which sex is better at managing money.

Conflicts concerning money 5

The majority of consumers in a long-term relationship have no conflicts concerning financial affairs

The Netherlands has the highest percentage of couples that have not had a conflict with their partner because of money. Only in Turkey and Poland is the number of couples that have ever had a conflict concerning financial affairs higher than the number of couples that never had such a conflict.

0%

10%

20%

30%

40%

50%

60%

70%

80%

Netherlands Belgium Germany Austria France Italy Spain UnitedKingdom

Luxembourg Turkey Poland

Have you ever had a conflict with your partner because of money?

Percentage of those in a long-term relationship who have not had a conflict with their partner because of money

Overview of ING International Survey results concerning financial competence | Conflicts concerning money 22Source: ING Research

conducted by TNS

Financial shopping attitude 6

0%

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70%


I don't shop around for financial products as I like to stick to one financial provider/bank

Percentage of people who don't shop around for financial products

Major differences between countries on which consumers shop around for financial products

Poland has the largest percentage of consumers who do not shop around for financial products because they like to stick to one financial provider/bank. This is almost twice as high as in the United Kingdom, where only one out of three consumers does not shop around for financial products because they like to stick to one financial provider/bank.

Overview of ING International Survey results concerning financial competence | Financial shopping attitude 24Source: ING Research

conducted by TNS

The number of consumers that do not shop around for financial products is highest among older people

The level to which people shop around for financial products decreases as people become older. Older people stick to one financial provider/bank more frequently than young people.

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18-24 years 25-34 years 35-44 years 45-54 years 55+ yearsI don't shop around for financial products as I like to stick to one financial provider\bank

Percentage of people who don't shop around for financial products

Overview of ING International Survey results concerning financial competence | Financial shopping attitude 25Source: ING Research

conducted by TNS

Contact Information 7

Country Contact Name Contact Phone Contact Email

Andrea Hansal +43 16800050148 [email protected]

Liesbeth Van De Craen +32 25476490 [email protected]

Maire Ginhoux +33 607566202 [email protected]

Patrick Herwarth von

Bittenfeld

+49 692722266886 [email protected]

Elisa Pavan +39 0255226563 [email protected]

Pierre-Olivier Rotheval +352 44 99 5626 [email protected]

Ian Bright +44 2077676656 [email protected]

Ewa Szerszen +48 228204117 [email protected]

Patricia Leiva Asenjo +34 916349244 [email protected]

Buket Okumus +90 212 335 1066 [email protected]

Martin Rutland +44 1189381969 [email protected]

Ian Bright (Economist) +44 2077676656 [email protected]

TNS NIPO Robbert Keller +31 20 5225 963 [email protected]

Contact List

Overview of ING International Survey results concerning financial competence | Contact Information 27

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Economy & Finance

Overview of ING International Survey results on financial competence