Data | Retired men in cities have most financial literacy: Survey Premium

The survey hints that those with better financial knowledge tend to retire early

In India, retired men, especially those living in urban areas, have the most financial literacy among various comparable cohorts, according to the results of a survey published in the Reserve Bank of India (RBI)’s June 2023 bulletin. In contrast, daily workers/labourers aged 20-29, who are educated up to Class 12, have the lowest levels of financial literacy. This makes them vulnerable to exploitation by moneylenders.

The financial literacy field survey was conducted over 45 days and elicited 584 responses that were initially collated between February 26 and April 14, 2022. The respondents were people who visited the RBI exhibition in Hyderabad. The sample was drawn from various geographical, educational, age, income, and gender backgrounds. The survey was designed to test the financial knowledge, financial behaviour, and financial attitudes of the respondents.

Chart 1 | The chart shows the results of the part of the survey that tested financial knowledge.

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The respondents were asked whether they were aware of the RBI’s Ombudsman Scheme which customers can use to lodge complaints against banks and other financial institutions. The respondents were then assessed on their knowledge of the risk-return relationship. Did they understand that an investment with a high return is likely to be high risk? Did they know that being offered a chance by someone to make a lot of money also meant that they could lose a lot of money? Did they understand that high inflation means that the cost of living is increasing rapidly?

The respondents were also tested on their diversification skills. They were asked whether they were aware that the risk of investing in the stock market gets reduced if they buy a wide range of stocks and shares. Based on the answers, scores were assigned.

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