In the Cyprus of 2025, where technology accelerates every aspect of economic life and the exposure of the citizen to financial decisions is daily and constant, one statistic continues to cause legitimate concern: 6 out of 10 Cypriots are financially illiterate. This is not a simple statement but it is a conclusion that is highlighted with scientific clarity through studies by the Cyprus University of Technology (CUT).
The systematic studies of the CUT, which started in 2016, highlighted the dimension of the phenomenon over time, through a rigorous scientific approach. In particular, they were based on questionnaires harmonized with the international standards of the Organization for Economic Cooperation and Development (OECD) and focused on the basic knowledge and skills required to understand fundamental concepts such as disinflation, inflation, the time value of money, debt management and investment diversification. The surveys covered the full age range from 15 to 65 years, with a particular focus on young people and in particular the critical age group of 18 to 29 years.
The grand conclusion remains constant and alarming as about 60% of the Cypriot population seems to lack basic financial literacy. As the findings typically show, low levels of financial literacy are not limited to people without access to formal education, but are even recorded among university degree holders. Moreover, the analyses of the CFCC research findings capture a number of structural features of financial literacy in Cyprus:
- The phenomenon is more pronounced among women. In a study where the research sample of male and female students attending five Cypriot universities, it was recorded that about 70% of female students were unable to answer correctly basic financial questions, compared to 55% of male students. This gender gap is probably not just a statistical finding, but may reflect deeper inequalities in access to financial knowledge, opportunities for professional empowerment and, ultimately, the possibility of financial autonomy.
- Age does not protect against ignorance. Research shows that the problem is more pronounced among young people, even among those who have received a university education. Young people, despite their general familiarity with technology, show gaps in their understanding of basic financial concepts.
- Economic education seems to have class dimensions. Studies show that the severity of the problem increases as family income decreases. In particular, the results show that in households with an annual income of up to €20,000, the financial illiteracy rate is as high as 70%.
- Education acts as a shield and a tool for good decision-making. One of the most interesting research findings concerns the impact of financial education on the level of financial knowledge. Those who have had the opportunity to take finance courses at school show significantly higher levels of understanding and skills. This finding is in line with the international literature, according to which financial education contributes positively to the formation of good financial behaviour from an early age.
Both from the studies of the CUT and from the international literature it is clear that financial literacy is not a luxury, but a basic prerequisite for economic prosperity, social participation and protection from forms of economic exploitation. Citizens without basic personal finance management skills are more vulnerable to indebtedness, delay planning for retirement, are reluctant to use digital banking services and are more prone to financial fraud. In contrast, financially literate citizens are more likely to save, invest responsibly, manage their debt effectively and make better decisions about their financial future.
It should be noted that, apart from the systematic studies of the CUT, similar findings also arise from surveys conducted by the Central Bank of Cyprus, which confirm the widespread lack of basic financial knowledge among the population. The challenge now is to move from recognition to action. The formulation of the National Strategy for the Promotion of Financial Literacy in 2022 and the activation of the Cyprus Financial Literacy and Education Committee (CyFLEC) are positive steps. Although Cyprus has already come a long way in terms of strategy formulation, there is still a long way to go in terms of implementation. Therefore, acceleration, deepening and substantial penetration at the grassroots of society is needed.
The need for immediate and meaningful action becomes even more urgent when we consider that financial illiteracy is not a problem of ‘others’ or a threat that may arise in the future. It is a real, everyday phenomenon that acts subterraneously and undermines individual well-being, household stability and, ultimately, the resilience of society itself. It is a “mirror” that, among other things, reflects the weaknesses of our education system (which lacks an institutionalised and autonomous financial literacy course) and the continuing difficulty of accessing reliable financial knowledge.
In conclusion, the question ‘Do you think you know how to manage your finances?’ takes on even greater weight in the light of scientific findings. This is because the majority of citizens in Cyprus have significant gaps which should not leave us indifferent. Financial literacy is not only a critical issue of responsibility and social cohesion, but it is also a collective good. A society that invests in it creates stronger economic foundations, reduces inequalities and prepares future generations for a path of sustainable development.
Source: Cyprus University of Technology | News & Announcements (https://tinyurl.com/5xymunpn)