OECD Releases New Report Highlighting Financial Literacy Challenges

OECD has released a new report that assesses financial literacy levels among adults in 39 countries and economies. The report found that, on average, only 34% of adults reached the minimum target score on financial competence, defined as scoring at least 70 out of 100 points.

Key Findings

• Financial literacy levels vary widely across countries. In some countries, such as Belgium, Slovenia, and the United States, over 60% of adults reached the minimum target score. In other countries, such as Mexico, Peru, and Turkey, only 20% of adults reached the minimum target score.
  
• Financial competence is positively correlated with income and education. Adults with higher incomes and higher levels of education tend to have higher levels of financial competence.
  
• Digital financial competence levels are also low. On average, only 29% of adults reached the minimum target score on digital financial knowledge.
  

Implications on Financial Literacy

The low levels of financial competence found in the OECD report have important implications for individuals, households, and economies. Individuals with low financial literacy are more likely to make poor financial decisions, such as taking on too much debt or failing to save for retirement. This can lead to financial hardship and instability. Household with low financial literacy are also more likely to experience financial difficulties, such as debt defaults and bankruptcy. This can have a negative impact on the economy as a whole.

Policy Recommendations

The OECD report makes a number of recommendations for policymakers to improve financial literacy. These recommendations include:

• Continue to improve basic financial knowledge.
  
• Design programs and strategies to strengthen financial behaviours and attitudes.
  
• Improve digital financial literacy.
  
• Continue to support people with the lowest financial literacy.
  
• Continue to collect and analyse data on financial literacy.
  

By implementing these recommendations, policymakers can help to improve financial literacy and, in turn, improve the financial well-being of individuals, households, and economies.

Conclusion

Financial competence is an essential life skill that can help individuals make sound financial decisions and achieve financial well-being. The OECD report highlights the importance of financial literacy and provides a number of recommendations for policymakers to improve financial literacy levels. By implementing these recommendations, policymakers can help to ensure that everyone has the knowledge and skills they need to manage their finances effectively.

The scores for some of the European countries

1. Germany 🇩🇪 76 of 100
2. Ireland 🇮🇪 70 of 100
3. Luxembourg 🇱🇺 68 of 100
4. Malta 🇲🇹 68 of 100
5. Estonia 🇪🇪 67 of 100
6. Sweden 🇸🇪 66 of 100
7. Finland 🇫🇮 65 of 100
8. Spain 🇪🇸 64 of 100
9. Netherlands 🇳🇱 64 of 100
10. Portugal 🇵🇹 63 of 100
11. Croatia 🇭🇷 62 of 100
12. Poland 🇵🇱 62 of 100
13. France 🇫🇷 62 of 100
14. Greece 🇬🇷 61 0f 100
15. Hungary 🇭🇺 58 of 100
16. Latvia 🇱🇻 59 of 100
17. Cyprus 🇨🇾 56 of 100
18. Lithuania 🇱🇹 56 of 100
19. Romania 🇷🇴 54 of 100
20. Italy 🇮🇹 53 of 100

OECD average: 63 of 100

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