Financial Literacy Level in Singapore Falls
Published By : 14 Apr 2015 | Published By : QYRESEARCH
The latest Financial Literacy Index for Asia Pacific, released by MasterCard, revealed low financial literacy in Singapore. The nation ranked sixth among the list of 16 countries where the survey was done. Singapore had ranked fourth in the earlier survey. Taiwan leads the list of the surveyed countries, followed by New Zealand and Hong Kong. Though Singaporeans are well-acquainted with financial planning, the survey showed that they have lesser knowledge about the basic financial concepts such as inflation and diversification. The report also revealed that in 12 out of the 16 countries surveyed, decline in financial literacy was attributed to the stalling of the awareness efforts regarding financial skills.
According to T.V. Seshadri, the group executive of Global Products and Solutions, Asia Pacific at MasterCard, financial literacy is very important for the people to plan their future and it is an important part of the financial inclusion. He also mentioned that in both developed and emerging economies, people were struggling to understand the basic financial terms and concepts.
MasterCard calculated the financial literacy score through a weighted sum of basic money management, financial planning, and investment. The survey defined financial planning as the practice of saving amid a lack of social security benefits. Myanmar ranked higher in the category of financial planning in the list of the surveyed countries. However, Japan emerged as the biggest spender of the savings and retirement funds. According to the data revealed by Organization for Economic Cooperation and Development, the Japanese households save only 0.6 percent of the disposable income. The survey also observed that most of the Asia Pacific countries have low knowledge of retirement funds.