45% of Israelis over the age of 20 cannot make ends meet, the Central Bureau of Statistics reported today. Its Financial Literacy Survey found that Israelis' knowledge about calculating interest rates, inflation, and investment yields versus risk is below the global average.
80% of respondents said that they compare prices before buying goods, because of the cost of living and rise in prices since the social protest in the summer of 2011. 62% of respondents said that they were more savers than spenders.
The Financial Literacy Survey was jointly conducted by the Central Bureau of Statistics, Bank of Israel, Ministry of Finance, and the National Economics Council in January-May 2012 among a representative sample of 1,200 people over the age of 20. The government uses the survey for setting financial education policy, in line with OECD recommendations.
Financial literacy is defined as the ability to read, analyze, understand, and discuss financial and economic matters that affect an individual's welfare. Issues include the ability to assess financial opportunities, the proper use of money, planning for the future on the basis of the present, and responding wisely to economic changes.
50% of respondents said that they have a pension plan, 33% have a provident fund or advanced training fund, 22% have managers' insurance, 67% have health or nursing insurance, and 40% have structural insurance on their homes.
On savings and investment, 57% of respondents said that they have a savings plan or bank deposit, 14% said that they invest in stocks or bonds, and 8% said that they have a mutual fund or exchange traded fund (ETF). 44% of respondents said that they are not prepared to take financial risks, and 40% said that they prefer long-term savings over current expenditures.
Among couples, 33% of women respondents said that their husbands make financial decisions, compared with just 9% of men respondents who said that their wives make financial decisions.
On financial matters, 59% of respondents said that they can calculate annual interest rates, 29% said that they can calculate compound interest rates, 65% said that they understand the effect of inflation on the cost of living, and 48% said that they can link investments and yields.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2012
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