Only one out of four adults confident of financial plans for retirement
Only one out of four adults are confident that they have done a good job of making financial plans for their retirement, a survey on financial literacy in Malta has found.
As part of a retirement and financial capability strategy launched by the Ministry for the Family, Children’s Rights and Social Solidarity, a national survey with over 1,000 respondents was commissioned on financial literacy – the first such survey providing full empirical data on this specific subject.
In fact 1,013 respondents spread across six parts of the island and six different age demographics of adults took part in the survey. The survey itself gave various insights into the financial literacy situation in Malta.
The survey found that two in every three of adults consult someone else when making dayto-day decisions about money in their household, whilst only 21% felt that they have a high level of knowledge on financial matters. A further 34% admitted that they have a low level of knowledge when it came to these same financial matters. Also on the subject of financial competency, 60% of respondents were not able to calculate the amount available, at the end of five years, in a bank account of €100 with an interest of 2% per annum and no fees incurred.
The survey also found that whilst 72% of respondents can afford a major expense equivalent to their monthly income without the need for assistance, one in three adults have also experienced a situation where their income did not cover their living expenses and they hence had to use credit cards to obtain cash.
In terms of planning, only one in four were satisfied with the financial plans for their retirement, whilst only 13% of adults currently hold a pension fund, and a further 73% of adults have never heard of a pension fund. In terms of attitudes towards finances, less than 70% of respondents set long term goals and strive to achieve them.
Curiously, the language preference when reading investment products was found to be dead even, with 35% preferring English, and 35% preferring Maltese. 20% meanwhile had no language preference and the remaining 10% said that they do not read about investment products at all.
The survey was commissioned by the Ministry for the Family, Children’s Rights and Social Solidarity as part of their retirement and financial capability strategy which was launched last year – a strategy which had resulted directly from the fact that different pension reform groups had concluded that systematic reform to the pension system alone was not enough.
The research, which is based on an international methodology allows that Retirement an Financial Capability Group to compare where Malta stands in its actions to instil retirement and financial capability vis-a-vis other countries, whilst it also helps the group set a benchmark to be able to use for calculating progress.