And many consumers have a limited understanding of how the tax on savings accounts works.
That is according to a new survey that lays bare the extent of financial illiteracy in this country.
The PTSB ‘Reflecting Ireland’ research revealed that nine out of 10 of respondents think they have average or high financial literacy.
But specific questions asked as part of the survey contradict this view that people understand personal financial matters.
Today’s News in 90 Seconds – June 30th
The research found that four out of 10 respondents could not correctly answer a Junior Cert level business sample exam question on the impact of inflation on household purchasing power.
They were asked if high inflation is bad for their purchasing power – the quantity of products and services available for purchase with a certain amount of money.
The research found that only 58pc of respondents identified that high inflation is bad for their purchasing power.
Some 27pc got it wrong, answering that high inflation was not bad for their purchasing power.
And 10pc incorrectly said their purchasing power would remain the same in a period of high inflation.
Some 5pc said high inflation makes their personal finances more stable.
Consumers were also asked about the impact of DIRT (Deposit Interest Retention Tax) on their savings.
Only of respondents were able to correctly calculate the total amount of savings they would earn after DIRT is applied.
PTSB said these findings were consistent with other aspects of the survey, which also asked respondents to assess for themselves their ability to understand financial terms, concepts and products.
Just under 10pc of respondents said their financial literacy is low.
This cohort reported feeling down about their finances and feeling uncomfortable talking about money to family and friends.
Some 40pc of respondents cited the belief that feelings of embarrassment can be a key barrier to improving financial understanding.
The survey, conducted by Core Research, also found that only 53pc of people are comfortable talking to a friend or family member about money.
PTSB chief sustainability and corporate affairs officer Leontia Fannin said the results of the survey show that more needs to be done to raise financial literacy levels.
“These results highlight that support is needed to educate people on the importance of financial literacy in order to increase financial resilience, inclusion, and protection against financial scams,” she said.
Almost half of respondents felt technology has helped them to better understand fees and charges, financial products and services available, and their personal spending habits.
This increases to an average of 57pc for those aged between 18 and 24.
Those over-55 are the least likely group to have used technology to help understand their finances better.
A drop in consumer sentiment towards the economy was also recorded in the replies.
More than half believe the country is on the wrong track, a number which has grown significantly since the start of the year.
Some 42pc say their financial situation has deteriorated over the past 12 months.
And a third say they expect to be worse off in a year’s time, and a similar proportion say they will be no better off.
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