Most Russians simply need to be financially enlightened. This is what the monitoring of financial behavior and the population’s trust in financial institutions (2009-2015) found. The study is carried out annually by HSE LSES and is based on a survey of 1,600 respondents over 18.
The results were presented by Olga Kuzina as part of a project on the launch of a federal network of financial literacy centers for teachers.
The survey question on whether respondents consider themselves financially literate revealed huge potential for financial enlightenment. Only 2% of participants assessed their knowledge with an ‘A’ grade. And the number of ‘A-grade students’ has not increased from 2008 to 2015. Nor did many rate themselves with a ‘B’: just 10-14%, peaking at 22% in 2010.
Most of the respondents assessed their knowledge as ‘D grade’: in October 2015, 44% of participants graded their knowledge C, D, and even F (total lack of knowledge and skills). The situation has changed little over eight years – in 2008, 50% were ‘underachievers’.
A sharp rise in the proportion who classed themselves as somewhat educated was recorded in 2010. This was partly a result of the crisis, but the researchers also note a clear information impact: economic themes were actively discussed in the media. ‘The media coverage today is different and focused on international politics, and this effect is less pronounced these days,’, Olga Kuzina explained.
Having a written personal budget detailing income and expense is one of the key parameters of financial literacy. Before the 2008 crisis, a considerable part of the population kept this kind of budget (45% of respondents).
This proportion dropped considerably, to 24%, in 2009. This collapse looks illogical at first glance, since control over money is supposed to increase during a crisis. The experts believe that two factors played a role here: lack of any decrease in the population’s real income, and a narrowed planning horizon. The amount of money did not decrease (so no strict control was needed), and it made no sense to set long-term goals of the kind that demand thorough money management in these highly uncertain circumstances.
But then the situation changed. The proportion of those who keep a full or partial budget reached 30% in October 2015. Incomes are dropping, and there is a real need to keep track of this dwindling resource.
The proportion of Russians who keep full, written, family budgets that detail all types of income and expense, remains insignificant, 14%.
Most Russian residents use banking services, but not everyone knows what state insurance of private savings means. In October 2015, 46% of respondents were puzzled by the survey question on whether they know what assets are specifically insured by the state.
11% believe that the state guarantees all private money deposited in any business entity. 4% believe that their property investments are protected if the developer goes bankrupt. Only 36% gave the correct answer (only bank deposits are insured).
Income correlates with risks: the higher the income, the more risks. Not all Russians know and understand this. 51% of respondents failed to say even roughly how profits correlate with risks. Only 28% gave the correct answer (the lower the risks, the lower the profits).
One in ten takes blind risks when using financial services. 10% sign financial contracts without reading them and rely on the employee selling the service.
The proportion of those who do read it but sign whether or not they understand the contract conditions grew from 19% (November 2009) to 26% (October 2015).
36% of respondents read, clarify, and only then sign the document. This proportion remains stable throughout the survey. But the share of those who face such documents in general is changing. Only one quarter of the population today has no experience of signing contracts with financial companies, while five years ago this was 37%.