Recognising the importance of measuring financial knowledge as a building block of financial capability, this report analyses New Zealand’s financial knowledge by age, gender, ethnicity, education, employment status and personal income to identify areas of need and opportunity when targeting delivery of financial education. 

Key findings:

• New Zealanders have a good understanding of inflation, interest and risk and return (over 90% correct responses).

• However, they struggle with understanding compound interest, risk diversification and time value of money.

• Only 22% answered all questions correctly.

• Financial knowledge increases with age; young people have the lowest financial knowledge and understanding the time value of money is where age makes the most difference.

• Women have lower financial knowledge than men; twice as many men as women answered all questions correctly.

• In the youngest age group, men and women start with the same score but men increase their financial knowledge more with age and women do not catch up.