Research Library
OECD/INFE survey of adult financial literacy competencies
On this page
- Context
- The study
- Key findings
- Points to consider
Context
Financial education is becoming increasingly recognised by the international policy agenda, with sets of high-level principles relating to financial education and endorsed by the G20 leaders over the past few years. Consequently assessing financial literacy is a prominent and vital part of a successful national education strategy. It allows stakeholders to target policy specifically where it is most needed, while international comparisons allow countries to benchmark themselves alongside each other.
The study
This 2016 report addresses a call from G20 leaders to develop practical tools for financial literacy measurement. Thirty countries (among them 17 member countries of the OECD) participated in an international survey on financial literacy, using the International Gateway for Financial Education (INFE)/OECD toolkit to collect data that was comparable between countries. Overall, 51,650 adults aged 18 to 79 were interviewed using the same core questions throughout all countries. This study gives high-level findings looking at financial knowledge, behaviour, attitudes and inclusion, and gives insights into the financial literacy competencies of populations in terms of their future financial education needs.
Key findings
- The average score across all participating countries was 13.2 out of a maximum score of 21 (up to 7 for knowledge, 9 for behaviour and 5 for attitudes).
- The average score in OECD countries was 13.7, while in the United Kingdom it was very close to the overall average at 13.1.
- The reasons for low levels of literacy vary between countries. In some places knowledge is the main issue, while in others it is behaviour. For example, Latvia and Estonia have higher-than-average levels of financial knowledge, but their overall levels of financial literacy are low due to their financial behaviour scores.
- Just over half (56%) of adults across all countries score at least five out of seven on financial knowledge (in the UK, the average score was 4.2).
- Overall, only 42% of adults were aware of the benefits to saving of interest compounding (52% in the UK), while only 58% could compute a percentage to work out a simple interest rate (57% in the UK).
- Three-in-five men (61%) achieved the minimum target score in financial knowledge, compared to just half (51%) of women. In 19 out of the 30 countries and economies, there was a statistically significant difference between men and women when it came to their financial knowledge scores.
- Interestingly, self-assessed levels of financial knowledge were fairly realistic.
- 85% of people in France achieved this target, compared to just a quarter of the respondents in Hungary, and 54% in the UK.
- The weakest areas of financial behaviour were budgeting, planning ahead, choosing products and using independent advice.
- Overall, 20% of people had had to borrow money in the past 12 months to ‘make ends meet.’ This was as high as 45% in Georgia and Thailand, but as low as 6% in Belgium and just 7% in the United Kingdom.
- Just half of all adults achieved the minimum target score for financial attitudes. However, in Albania, Hungary, Portugal, Canada, Norway and New Zealand more than six-in-ten did so.
- The report concludes by offering three high-level findings that enable a provisional set of policy implications to be drawn up:
- The overall low levels of financial literacy stress the importance of starting financial education early and ideally at school.
- Public authorities should look to strengthen knowledge, skills and behaviours through a range of financial education initiatives combined with other policies.
- The regulatory environment and consumer protection network should be combined with financial education to improve financial resilience.
Points to consider
- Data is weighted to ensure that all findings are nationally representative. Full details of the survey are given in the appendices.
- This report is relevant to all stakeholders and policymakers with an interest in financial education and financial literacy.
- While the UK is included in the research, much of the report deals with the countries ‘as a whole’ so not directly relevant to the UK. However, UK findings are reported in this summary where appropriate.