While the overall financial literacy score in India stood at 12.4 out of 19 in a Reserve Bank of India (RBI) survey, retirees scored the highest at 13.5, making them the most financially literate.

RBI unveiled the study results as part of its June bulletin 2023 at the Numaish All India Industrial Exhibition, Hyderabad. It conducted the survey from April to May 2022 to understand India’s financial literacy levels across metrics such as age, income level, education, etc.

Retires secured the highest score at 13.5 in financial literacy, followed by those aged 50 and above, with income levels of Rs 1 lakh and above, at 12.8.

In percentage terms, retirees scored 69.6 per cent, showing their decent financial knowledge. The daily wage earners scored the lowest at 56.5 per cent in financial literacy levels.

The males were found to be more literate financially than the females. Financial literacy was assessed on knowledge, behaviour, and attitude. The survey shows that financial literacy is higher in advanced age groups, higher income levels and education. The place of living was also a factor in financial literacy. Let us dive deep into the survey.      

Gender: Of the three financial literacy components, financial behaviour was in tandem with financial knowledge. However, the financial attitude was better in females who scored lower in financial literacy than males. Women have a better financial attitude but lack financial behaviour and knowledge, decreasing their financial literacy score. Males’ score stood at 63 per cent, whereas females’ score was 61.4 per cent.   

Age: People aged 60 years and above, though, have the highest overall score lagged in financial knowledge compared to people aged 40 to 59. Likewise, respondents aged 30 to 39 had an average score despite their high score in financial behaviour due to a lack of financial attitude and knowledge. 

Place Of Living: The respondents living in metros scored high on financial knowledge and behaviour but lacked financial attitude and secured lower overall financial literacy scores.  

Income Level: The respondents with incomes between Rs 20,000 and Rs 50,000 have lower overall financial literacy than those with a monthly income of less than Rs 20,000 or more than Rs 50,000. Respondents with an average monthly income of Rs 1 lakh or more aced the financial literacy score, with a 65.4 per cent score.    

Education: The survey found that financial literacy is lower in respondents with education levels up to 12th standard than those with higher education. The education level shows the difference in financial literacy over all its three components.  Besides, married respondents have better financial literacy than those who are single. Also, the salaried respondents were more financially literate than the self-employed and homemakers.  

The RBI survey was one of its initiatives to increase financial literacy in the country. The results show that its work must focus on all three metrics—financial knowledge, behaviour, and attitude—used for measuring financial literacy. The study highlights that retired people have the highest overall financial literacy in all three departments: knowledge, behaviour, and attitude, whereas respondents aged 60, a typical retirement age, and above, scored higher in financial attitude and behaviour, but lacked financial knowledge.