A quarter of Belgians score below average on a knowledge test with questions about money and investments according to research by Dutch bank ING. This means that Belgians perform significantly worse than Dutch people and Germans. People who lack essential financial knowledge are more vulnerable to stress and fraud, the bank argues.
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Quarter of Belgians have little basic financial knowledge making them vulnerable to fraud and scams
Colin Clapson
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ING presented a short financial knowledge test with five multiple-choice questions to a representative sample of more than 1,000 Belgians. The questions concerned the effect of interest on savings and investment risk.
A quarter of the Belgians surveyed could only give one correct answer at most and therefore have a low level of basic financial knowledge. A third gave at least four correct answers and can therefore be considered financially literate. On average, Belgians only just scraped through, with 2.6 out of five questions answered correctly.
Men and older people fare better in the test
On average, men score slightly better on the test than women. Financial knowledge also clearly increases with education level and age. Interestingly, young people rate their own financial knowledge higher than older people, even though the results do not reflect this.
In the study 63 per cent of respondents with limited financial knowledge rate themselves higher, while 66 per cent of people who score well tend to underestimate themselves.
ING bank also conducted the same survey in Germany, the Netherlands, Spain, Poland and Romania. The results show that on average Belgians have a lower level of basic financial knowledge than Germans and Dutch people, but that their scores are higher than those in the other countries surveyed.
Vulnerable to fraud and scams
ING argues that financial literacy also has a clear impact on people's lives and their ability to see off attempts at fraud. Around two-thirds of Belgians say they have confidence in their own money management. At the same time, in the past year one-fifth of Belgians made a financial decision that they regret. One-fifth were also victims of fraud or scams.
‘People who are less financially literate are also less able to assess whether or not they have been the victim of fraud,’ explains ING economist Alissa Lefebre. Among this group, 1 in 4 respondents are unsure about this. Among people who score well on the test, this group of doubters is much smaller.
Low financial literacy therefore causes vulnerability and stress: almost 30 per cent of this group lie awake worrying about their finances, compared to only 10 per cent of the group with high scores. More than 4 in 10 Belgians (44 per cent) are also afraid to invest their money. Among people with low basic financial knowledge this figure is more than half.