Cyprus ranks among the lowest in Europe in terms of economic poverty, with a large percentage of the people lacking the basic financial information necessary for managing their economic well- being.
Also, the lack of financial information does n’t help people make informed decisions, especially regarding borrowing from banks.
The new research by the European Commission, titled” The state of financial information in the European Union”, commented on by the Bruegel Institute, shows that Cyprus, along with Greece, Portugal, Romania, and Bulgaria, are the lower five states, with their populations able to distinguish and understand simple financial aspects.
Those topping the list in financial education are the Finns, followed by Albanians, Danes, and Link, and completing the bottom five are the Dutch.
As indicated by the statistics, communities in Northern Europe possess better economic awareness than the rest of the EU. The major ten with excellent financial information include Sweden, Luxembourg, Czech Republic, Germany, and Malta, the only southeastern region in the top ten.
Regarding online bank, information from Cyprus shows it is used by people with more fiscal information.
Certainly, electronic bank incorporates levels of complexity and thus requires greater financial information.
Similarly, preliminary information on the rights of bitcoin (essentially Bitcoin, dominant in the market ) show that countries with higher levels of financial information had more individuals holding crypto assets.
The study posed five questions to determine information about prices, compound interest, pricing of standard assets, the risk- return relationship, and risk diversification.
Only over 50 % of respondents, on average across the EU, could effectively answer at least three of the five information inquiries. Therefore, it is confirmed that financial literacy remains lower, given that the questions measure standard monetary concepts used in daily financial decision- making.
Of the five ideas, respondents better understood the chance- return marriage and prices, with about 65 % answering the related questions effectively. However, focusing solely on inflation also means that 35 % of respondents do not understand that inflation reduces their purchasing power.
As inflation has been exceptionally high since 2022, these findings show the difficulty many homeowners face in adjusting consumption and saving behaviour to such high price rises.
There are also some indications about the effects of financial information on managing a tenant’s silent side, as individuals with low levels of financial information tend to use on more costly terms, especially young people.
Also, bad financial information prevents people from preparing for the future. The study claims that those with low rates of financial information are less likely to prepare for retirement.
It is noted that as societies age and people live longer after retirement, having sufficient means will be important for the fiscal stability of households and the sustainability of public- supported pension systems.