The financial culture of the French? In the average

What is the Livret A rate? Trick question for most French people, who are only 31% to know the correct answer, 0.50%, according to the 2021 study on the financial culture of the general public of the Banque de France, published on December 13. While, inflation requires, this rate must be slightly raised in February, respondents tend to underestimate the current remuneration of this tax-exempt booklet, almost one in three thinking that it is only 0.25%.

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At the end of this survey, carried out by the CSA institute (which is based on a sample of the major French population of 2,150 people, with 2,000 online interviews and 150 by telephone), the French are in fact, in average, given a financial literacy score of 13 out of 21. This is precisely the average of the Organization for Economic Co-operation and Development (OECD), at least of the eleven other countries where such a survey was also carried out (Slovenia, Austria , Germany, Estonia, Portugal, Poland, South Korea, Czech Republic, Hungary, Colombia, Italy). At the top of the twelve comes Slovenia (with a score of 14.7 out of 21), with Italy bringing up the rear (11.1 out of 21).

This study has indeed an international scope, it is based on a questionnaire designed by the OECD. Since the beginning of the 2000s, this organization has taken up the subject of financial education, by encouraging member countries to set up national strategies aimed at improving the financial literacy of the general public, by comparing the different measures implemented. work, and by measuring the levels of knowledge of the populations.

In France, the national strategy was launched in 2016 by Bercy and the Banque de France is its “operator”.

Significant room for improvement

“Since I arrived [à ce poste], I hear people say: the French are zero in finance. No, we are not bad, we are average ”, comments Stéphanie Lange-Gaumand, head of the economic, budgetary and financial education department of the Banque de France for a year.

This overall score of 13 out of 21 includes, in detail, three sub-scores: one for financial knowledge (the French obtained 4.6 out of 7), one for attitude towards money ( posture – 3 out of 5), one for behaviors (concrete actions – 5.4 out of 9).

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The Banque de France welcomes behavior that “Seems thoughtful”, with “83% who pay their bills on time” and 71% who “Keep a close watch” their financial situation. “We are rather diligent but we build few long-term financial strategies, it is very marked among the French”, tempers Mme Lange-Gaumand.

In the field of theoretical knowledge, at a time when inflation has resurfaced, respondents seem very aware of its impact on the cost of living, but do not fully understand its consequences on their savings. They were asked what they will be able to buy in a year with 1,000 euros and annual inflation at 2%, compared to today: 27% think that these 1,000 euros will then allow them to buy more or as much and 17% don’t know.

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Another weak point: the famous compound interest (the fact that the interest received in turn produces interest) – a key concept for understanding the role of time in terms of investments. You deposit 100 euros in a savings account earning 2% per year, how much do you hold after five years? Only 42% answer “more than 110 euros”.

A large part of those polled do not master the revolving credit mechanism either (only 50% know that it is a loan that is automatically reconstituted over the monthly payments), but know much better (70%) of the definition of premiums ( interest received by the bank when an account is overdrawn).

Less doubts among 18-35 year olds

When it comes to financial literacy, women give the correct answers less often than men. For example, 27% of them know the Livret A rate against 35% of men, and 33% of them correctly answer the question on capitalized interest against 52% of men. They are also not at all sure of themselves on the subject: only 15% believe that they have a high level of knowledge about financial matters (28% of men are).

Younger people are also more likely to give the wrong answers. For example, only 35% of 18-24 year olds and only 40% of 25-34 year olds understand the impact of inflation on savings. This does not prevent 18-34 year olds from having self-confidence: 35% (against 21% of the general population) consider their knowledge of financial matters high.

Young people are, moreover, much more attracted than others to cryptocurrencies, such as bitcoin: 44% of 18-24 year olds and 28% of 25-34 year olds think it is a good time to invest – interest rates up from the previous survey in 2018 (it was 29% and 25%, respectively) – for an average rate for all ages of 17%.

1 900

This is, according to the Banque de France, the number of fourth grade classes to experience, during the 2021-2022 school year, the “Educfi passport”, in the thirty national education academies. It was 74 classes in five academies the previous year. Initiated as part of the national financial education strategy, this passport aims to make students aware of the basics of personal finance and should be generalized in the years to come. According to the 2021 survey on the financial literacy of the general public, 80% of French people think that financial and budgetary education should be taught in school. From primary for 21%, college for 38%, high school for 21%.

In addition, they are among those who are most interested in financial news and financial subjects (49% of 18-24 year olds, 45% of 25-34 year olds, against 42% of the general population); only those over 65 do as well on this point (49%).

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Finally, the study sees potential “Effect of the health crisis” : respondents seem to have, is it indicated, “A more serene approach to money” than in 2018. They are 42% to say they are satisfied with their current financial situation (+ 7 points), and 49% to declare that they have money left at the end of the month (+ 7 points).

The rate of respondents fearing that they will not have enough money over the long term drops from 45% to 39% from one study to another, and that of respondents indicating that they have had difficulty making ends meet in the last twelve months of 47 % to 39%

Entrepreneurs have a “fairly solid” financial culture

For the first time, the Banque de France also looked into the financial culture of entrepreneurs, by interviewing 1,002 of them, in companies with less than 50 employees, again on the basis of a questionnaire from the Organization for Economic Co-operation and Development (OECD). Results : their average score is higher than that of the general public, 12 out of 17 (so almost 15 out of 21).

“Their financial culture is rather solid”, decrypts Stéphanie Lange-Gaumand, of the Banque de France, “Even if avenues for improvement exist”. They are thus only 47% to know that when a company obtains equity from an investor, this one becomes partially owner. To support entrepreneurs on financial and budgetary issues, an official website was put online at the end of 2019, My entrepreneurial questions.

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The financial culture of the French? In the average