Over 70% of adults can cope with major expense without needing to borrow money, survey finds

A financial literacy study has found that 72% of adults in Malta, just over one in five, are able to face a major expense equivalent to their income without having to borrow money or turn to family members.

The study, however, indicates lower scores for younger cohorts, with 62% of those aged 20 to 29 and 68% of those 30 to 39 being equipped to deal with such an expense.

The survey was carried out by Gemma, the Family Ministry's 2017-2019 strategy on retirement and financial capability, which also runs a financial capability portal at gemma.gov.mt aiming to help people in matters such as retirement savings, money management and investment.

It was based on the Organisation for Economic Co-operation and Development/International Network on Financial Education toolkit, with a number of other participant countries carrying out similar surveys.

In total, the study in Malta asked 1,000 respondents about issues related with managing their finances and their financial behaviour and level of knowledge.

It found that 64% of adults have not encountered a situation in which their income did not cover their living expenses in the last 12 months, and that, of the 33% who experienced a situation in which their income didn't stretch enough to cover such expenses, 86% used methods such as cutting back on spending to address the problem.

One in three respondents, or 32%, said they tended to worry about paying their normal expenses, while 20% indicated that this was rarely the case. Another 19% stated they worried often about this matter, and 18% said they always worried.

The Gozo region had the highest percentage of respondents who indicated they always tended to worry about paying their day-to-day expenses.

A very large majority of adult respondents - 93% - said they were active savers, with 84% of adults using a savings/deposit account to save.

When it comes to keeping an eye on household finances, the most popular way of doing so for Maltese adults was by noting down their spending, with 46% using this method.

In terms of personal finances, 62% of adults said they kept a close watch on their financial affairs. This was considerably higher than the average of all participating countries, which stands at 51%, and that of all OECD countries, which registers at 50%.

When it comes to paying their bills, 95% of Maltese adults stated they always or often did so on time.

Some 80% of adults also said that always or often carefully considered whether they could afford to buy something prior to purchasing it.

Most feel they don't have excessive debt

Only 13% of all respondents indicated that they had "too much debt" at the moment, with 75% disagreeing or completely disagreeing that their level of debt was excessive.

The remaining 12% of respondent neither agreed nor disagree with the statement "I have too much debt right now."

The greatest number of those who agreed or completely agreed that they had too much debt were those in the 30 to 39 age cohort.

The survey also asked about the level of financial knowledge amongst respondents, with 44% rating this as average, and 21% considering themselves to possess a very high or quite a high level of overall knowledge on financial matters.