A quarter of French people lack knowledge of the financial sector. A reality that causes them to lose nearly 2,400 euros in interest per year.
One in four French people (26%) does not have the level of financial culture sufficient to make clear decisions in the matter, relates Allianz in a study published on Wednesday. This lack of knowledge leads them a potential shortfall of up to 2390 euros per yearcompared to investors mastering the subject.
This lack of knowledge can strongly penalize the financial choices of households
Too low a level of financial culture can have serious consequences. Indeed, over long periods of investment, like retirement savings, this lack of knowledge can seriously penalize the financial choices of households, said Ludovic Subran, chief economist of the Allianz group.
Nearly 2400 euros of loss of yield per year
In this study, Allianz highlights in particular the consequences of a low level of knowledge on the returns of the chosen investments. Thus in France, the lack of financial culture would cost around 2,390 euros per year for a person with a low level of financial culture, compared to a person with an average level of knowledge in the matter. Over 10 years, this loss would amount to 39270 euros for those less knowledgeable about the financial sector.
A French saver benefiting from a high financial education can thus generate 2730euros more interest per year that a saver devoid of financial culture, is almost the equivalent of the average monthly salary in France.
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The gap in level of knowledge is still present between men and women even if it has been reduced since 2020, explains Allianz. Thus nearly half of men (47%) say they are confident about their personal financial situation against only 33% of women.
As this study shows, without becoming a finance specialist, it is important to understand the key economic notions and to understand the basics of investment products, in order to make clear investment choices and optimize your investments as well as possible. A saver with some financial knowledge is more likely to make choices in line with their interests, explains Marion Dewagenaere, director of Allianz Patrimoine and leader of the ecosystem my future.
How to count the cost of the absence of financial culture?
Financial culture is measured according to answers to questions on interest rates, inflation, the notion of risk and return, or even diversification. Then, in order to assess the financial benefits of a good financial culture, Allianz constructed ideal model portfolios according to the level of financial culture and calculated the actual past returns.
Generally speaking, the difference in average annual return between a person with a low level of financial culture and a person with an average level of financial culture is particularly high, ranging from 1.2% in France, lit. we in this study, carried out in many countries, not only in France.
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