Context

This report presents the results of the third national survey of financial knowledge levels of adult New Zealanders. The Commission for Financial Literacy and Retirement Income commissioned the survey in 2013 as a follow-up to the 2009 and 2005 surveys.

The survey scope was expanded, to encompass financial behaviour as well as financial knowledge. The report presents the detailed findings from the 2013 survey and draws comparisons with previous surveys where appropriate.

The study

The research objectives were to:

• identify areas of low financial literacy and therefore assist educators to improve financial literacy in those areas
• identify sources/channels of financial education
• assist the financial services industry to improve design or communication
• measure changes in financial knowledge levels since 2009 in order to adapt education programmes and the design or communication related to financial products and services
• make comparisons with other countries
• explore links between financial knowledge and financial behaviour
• assist the Commission in identifying areas of further research.

A fully national survey of 852 people aged 18+ was carried out between 9 February and 31 March 2013. All interviews were conducted face-to-face. The average interview length was 61 minutes and the response rate was 59%.

Key findings

To reflect population characteristics, the data have been weighted by age, gender and household size. Key findings are summarised as:

• • At the overall level, financial knowledge has not changed since 2009, though there have been some significant shifts in specific aspects of financial knowledge (budgeting, retirement, money management, home loans, risk management, interest, financial advice and investing).
  • Since 2005 understanding of savings has increased, there has been an upward trend in mortgage holders’ understanding of equity and the use and understanding of internet banking continues to rise.
  • Comparisons with international data (from OECD) suggest that New Zealanders have relatively high financial knowledge.
• • The majority say they have financial goals, although fewer have a plan in place to achieve their goals.
  • Two in every three could access emergency money if something unexpected were to happen.
  • Around half annually review their insurance.
  • Use of internet banking has increased substantially.
  • Close to two thirds have a budget, and around half earn more than they spend.
  • New Zealanders appear to be keen to get a good deal when making significant purchases.
  • Many are keen to avoid interest on debt and most appear to be putting some money aside, at least for the short-term.
  • Fewer are receiving financial advice from media sources while more are using store cards and revolving credit facilities.
• • There is majority agreement that people are responsible for their own financial future, but there is a gap between knowledge and action, including on how much one will need for retirement and other methods of financial planning.

Points to consider

• A full description of methodology is provided, including the approach to sampling, field work, weighting for population characterisations and estimated sampling errors.
• There are a number of wider contextual considerations that may have influenced New Zealanders’ responses in 2013, for example; an increase in the uptake of the KiwiSaver scheme (a work-based savings initiative), high unemployment and the 2010 and 2011 earthquakes - leading to a greater focus on financial issues; the study is relatively new and it is not yet completely clear which changes are part of a trend, and which reflect short-lived fluctuations.

Full report

Financial knowledge and behaviour survey 2013 - full report