Financial Literacy of Croats Slightly Increasing, Young People Most Literate in Digital Sphere

The Croatian National Bank and Hanfa today presented the results of the third survey on financial literacy in Croatia, which show an average score of 12 out of 20, or 60 percent, which is only one percentage point better than the last survey conducted in 2020.

The HNB and Hanfa evaluated three segments: financial knowledge, attitudes, and financial behavior. Croats achieved the best results in the financial knowledge segment (70 percent), which is 5 percentage points better than the results in 2020, and 10 percent better than the initial results of financial literacy in Croatia. A better result was also achieved in the component of financial attitudes or relationships towards money, while the average score of citizens’ financial behavior fell from 56 to 53 percent.

A novelty this year is that digital financial literacy was measured for the first time, which includes knowledge of digital technologies and behaviors and attitudes related to behavior in the digital sphere. The average score of digital financial literacy is 4.87 out of 10, with the best result achieved in the component of digital behavior, although there is still room for improvement. Interestingly, the most literate in the digital sphere are young people.

The survey also showed that about half of the citizens use at least one form of active savings, and a third of respondents save by keeping money at home or in their wallets, while only 16 percent deposit into a savings account at a bank. It is also important to note that a quarter of respondents expect to continue working after retirement, two-thirds rely on the first pillar of pension insurance as the main source of funding in old age. 45 percent count on the second pillar, while only 10 percent mention the third pillar as a source of finance. Additionally, about 10 percent of citizens aged 30 to 39 have no plans for pension income, and among those aged 40 to 60, that share is around seven to eight percent.

Adequate Information Needed

The results also show that only eight percent use a financial advisor when making decisions, which is extremely poor when it comes to making significant life decisions. Furthermore, 86 percent of respondents pay their bills on time, and 45 percent have been unable to cover all living expenses due to the worsening economic situation in the last four years. Finally, 23 percent of respondents have given up something or reduced spending to make ends meet when their income does not cover expenses.

– The HNB continuously conducts activities related to raising the level of financial and economic literacy. The latest survey of overall financial literacy shows progress in knowledge, but it is clear that this can still be significantly improved. As a society, we will need to pay special attention to increasing the level of digital financial literacy among the population, as it is evident that this part of financial services is becoming increasingly present. The HNB has experience in conducting training for teachers and will continue to engage in such activities and support the strengthening of financial literacy through the education system – said HNB Governor Boris Vujčić at the presentation of the results.

Ante Žigman, the chairman of the Hanfa Management Board, also witnessed the presentation.

– The latest survey shows that our educational activities bring modest but important results and shifts in the level of financial literacy. As a regulator of the non-banking financial sector, it is especially important for us that citizens learn to protect themselves from risks when investing, to plan their retirement financially in a timely manner, and to protect themselves from financial fraud. We want to encourage them to adequately inform themselves before contracting services, to compare services, to get the best quality for their money, and not to lose it in attempts at fraud or misjudgment when investing – he emphasized.

The conference also featured a round table titled ‘Research Results – How to Improve Financial Literacy?’ where discussions were held by Martina Primorac Krmpotić, a professor at the Hotel and Tourism School in Zagreb, Ivana Žepić, head of the Financial Markets and Financial Literacy Sector, Ivana Herceg, director of the Systemic Risks and Consumer Protection Sector of the Croatian Financial Services Supervisory Agency, and Bojan Fras, vice-governor of the Croatian National Bank.

– The pandemic, aggression against Ukraine, and their consequences, as well as the earthquake, reminded us that we can face crises at any moment that can test our financial resilience. This is an opportunity to learn from our own mistakes, to enter a new cycle enriched by negative experiences that can help us improve our financial behavior in at least some segments and to realize that relaxed attitudes about personal finances, such as ‘I live for now,’ are ideologically and practically misguided – emphasized Fras.

The population survey was conducted by the IPSOS plus agency on a sample of one thousand respondents aged 18 to 79. The research was conducted according to the OECD methodology, for whose membership Croatia began negotiations in mid-last year.