People who have better understanding of finance are less likely to be worried about the later stages of their life, a new study has found.

It seems financial literacy – the ability to understand how money works, enables people to accumulate more assets and income during their lifetime, and so increases confidence for the years ahead, researchers said.

Additionally, financial literacy seemingly engenders a greater perception for risk and enables those who have it to face off later-life's dilemmas with ease.

The findings, from Associate Professor Yoshihiko Kadoya of Hiroshima University and Mostafa Saidur Rahim Khan of Nagoya University in Japan, stem from a study which asked people questions assessing their calculation skills, understanding of pricing behaviour, and financial securities such as bonds and stocks.

Respondents were also asked about their accumulated wealth, assets, and lifestyle – and to rate the level of anxiety they felt about life beyond 65.

The study suggests that men, and those with a higher level of education are more financially clued-in than women, and those with less education respectively.

The overriding thrust is that the more financially literate earn and accumulate more during their lifetime – and thus worry less about growing old.

It also appears that financial literacy helps shape people's perception towards risk and uncertainty – making them more capable and confident in tackling whatever problems life throws at them.

Financial literacy increases our awareness about financial products, builds a capacity to compare all available financial options, and changes our financial behaviour – all which bodes well for our perceptions of, and actual experiences during our seniority, said Kadoya.

While financial literacy taken alone was seen to reduce anxiety – its affect was further heightened by other factors.
Married respondents had even lower levels of anxiety about growing old than financially literate singletons.

This could be down to married couples together planning more-effectively for the future due to familial responsibilities.
Age also plays a significant role, with anxiety levels peaking around 40. The researchers suggest that people at this age have the most home and workplace responsibilities, but with less money and time to support them, increasing anxiety about the here and now – and the journey ahead.

As people get older their anxiety levels drop off on gaining access to social security, government funded health care and pensions – all taking the sting out of the post- retirement blues.

Having dependent children on the other hand increased anxiety levels – presumably due to respondent's worry for their children's wellbeing – as well as their own.

It is increasingly perceived that a pension is insufficient for daily expenses without a backup pool of savings and assets – putting the financially literate at a distinct advantage, researchers said.