Financial Literacy in Ireland: Are We as Savvy as We Think?

Financial Literacy in Ireland: Are We as Savvy as We Think?

4th August 2025

New research suggests a growing gap between how confident Irish adults feel about their finances, and what they know. The latest Reflecting Ireland Q2 2025 report from Permanent TSB highlights a striking contradiction between self-belief and financial understanding.

It raises an uncomfortable but important question: Are we fooling ourselves when it comes to financial literacy in Ireland?

90% Say They’re Financially Literate – But the Data Tells a Different Story

According to the survey, 9 in 10 Irish adults believe they have “average” or “high” financial literacy.

But when presented with simple questions on topics like inflation and interest after tax, many failed to answer correctly:

  • 42% couldn’t answer a Junior Cert-level inflation question
  • Only 20% correctly calculated the net interest earned after DIRT (Deposit Interest Retention Tax)
  • 4 out of 10 people surveyed failed to demonstrate they can correctly apply the concept of inflation. The most common incorrect answer was that purchasing power increases significantly, the opposite of what actually happens.

This is more than just a numbers game. It speaks to a misalignment between confidence and competence, a dangerous gap when it comes to making sound financial decisions.

Why the Confidence Gap Matters

Overestimating your knowledge can lead to:

  • Poor financial choices, like over-borrowing or under-saving
  • Vulnerability to scams, especially those that seem financially legitimate
  • Missed opportunities, such as tax-efficient saving or investment strategies

If we believe we already “know enough,” we’re less likely to seek advice or question our own assumptions. That’s why this confidence gap isn’t just a personal issue, it’s a public one.

What’s Behind the Gap?

Several factors may contribute:

  1. Financial jargon makes people feel they understand more than they do.
  2. Overexposure to apps and tech tools gives a false sense of control, without deep knowledge.
  3. Cultural attitudes often discourage asking questions about money, especially among older generations.

And while younger adults are more engaged with tech, they’re not immune either – digital tools can make money management easier, but not necessarily more understood.

From Confidence to Competence: What Needs to Change?

Improving financial literacy in Ireland means bridging the gap between how we feel and what we know.

Here’s what can help:

  • Ask yourself basic questions, like:
    • What does inflation really do to my savings?
    • How much DIRT do I pay on my interest?
    • What would I do if interest rates rose 2%?
  • Talk about money more openly with your family, your advisor, or your employer. Conversations lead to clarity.
  • Test your knowledge, take quizzes, attend webinars, or just read up. There’s no shame in not knowing, only in not wanting to.

Final Thoughts

The Reflecting Ireland Q2 2025 report reveals something we all need to reflect on:

Feeling financially savvy doesn’t always mean being financially secure.

In a world of rising costs, complex products, and rapid digital change, true financial literacy is about more than confidence, it’s about capability.

If you’re among the 90% who feel financially literate, now’s the perfect time to test that belief. Because when it comes to your money, knowing what you don’t know might be the smartest move you can make.

Need help assessing your financial knowledge?
Chartered Capital offers tailored advice to help you build real confidence based on real understanding. Book your consultation today.

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