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A recent study by the Economics Research Centre at the University of Cyprus has brought to light issues regarding financial literacy in the country.
Titled "Financial Literacy for Financial Resilience: Evidence from Cyprus during the Pandemic Period," the study found that in 2021, fewer than 4 out of 10 respondents had a good understanding of financial concepts. This means that many people lack the knowledge needed to make informed financial decisions.
The study also revealed that more than 1 out of 3 Cypriots are financially vulnerable, meaning they wouldn't be able to handle an unexpected expense without borrowing money or seeking help. Additionally, around 6 out of 10 respondents didn't have enough savings to cover three months' worth of living expenses if they were to lose their main source of income. This lack of savings was particularly pronounced among young people, the unemployed, those with low incomes, and larger households.
These findings suggest that many households in Cyprus were ill-prepared to deal with the financial challenges brought on by the COVID-19 pandemic. The Economics Research Centre emphasizes that having a good understanding of financial concepts is crucial for financial resilience.
The study's authors argue that financial education could play a key role in helping households improve their financial literacy and better prepare for future financial shocks. This highlights the importance of implementing policies aimed at increasing financial literacy among the population.
[Information sourced from CNA]
