No. 46




Financial Literacy Survey in Estonia

14 December 2022


RiTo No. 46, 2022

The survey results show that the theoretical financial literacy of Estonians did not improve between 2019 and the previous survey in 2015. However, over the nine years that this survey has been conducted, there has been an improvement in comprehending the nature of investment risk and in the interest rates calculation skills.

Less than one in five responders qualified their knowledge of finances as high, including two percent who saw it as very high, over one half as above average, and one fifth as low. Higher than average self-assessment came from younger responders, university graduates, entrepreneurs, high-income earners, and residents of Tallinn.

A major shortcoming is that a large part of the population does not plan their finances well enough (43 % compile a budget and this percentage is very slow to rise). Only 12 percent of the population makes long-term plans and investments. A great number of individuals are still not putting money aside or their savings are inconsequential. However, the share of non-savers is decreasing each year, although slowly.

The most popular form of saving is still putting money on a checking account (42%), followed by keeping a stash of cash (28%). Savings accounts are used by about one responder in seven, which is slightly higher than in 2015. Investment options are still used by a relatively small percentage, only 13 in total, with four percent of the population owning shares or stocks. Although the key criterion for choosing financial services has been the comparison of services offered by different service providers, there are financial services (credit cards, opening a checking account, or mobile payments) where different options are not considered.

Various loan options, insurance, and savings accounts are clearly the most popular financial services, while investment products continue to attract relatively few clients.

The 18–19 age group names investing into real estate as the most complicated issue, followed by starting a business, while cryptocurrency poses significantly less problems than on average. This age group shows even more indifference towards financial topics than the population on average – only a little more than one in five expressed their interest. Responders in the 50–59 age group considered the second pillar pension scheme as complicated more frequently than others. The oldest age group (60–80 years) referred to saving options and lending/borrowing as complicated more frequently than others, although they listed cryptocurrency as the most complicated topic.

The general financial situation and financial security have improved in Estonia over the past nine years, and most of the population is in a place where they would be able to put money aside. Unfortunately, the results show that although financial topics are not felt to be overly complicated, the general public is not applying their knowledge into practice, which means that we need to continue awareness raising.

We can conclude that the Estonians are relatively well informed and have sufficient basic knowledge to organise their financial affairs in a sensible way. As this knowledge is mostly left untapped when creating financial security for the family, we need to continue the activities that help turn this behaviour around.