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insight

Financial education in Europe

Evidence type: Insight i

Context:

With the constantly evolving financial landscape, and with more responsibility and risk being transferred to individuals, financial literacy is increasingly being seen as a key life skill in European society. Financial service providers and other stakeholders in a constantly diversifying market are continually developing increasingly complex products. This gives consumers more choice of credit, savings schemes and investment opportunities. Concurrently, individuals shoulder more responsibility and personal financial risk due to an uncertain financial environment and diminishing welfare systems. This changing landscape requires individuals to make key financial decisions to help secure their financial future. Financial education policies that empower individuals to make sensible decisions can contribute to personal and collective financial wellbeing, that in turn support financial stability and growth.

The study:

This 2016 OECD report provides an overview of the most relevant and innovative financial education policies and initiatives throughout Europe. The report also offers suggestions and highlights good practice.

The report is based on replies from national authorities to several questionnaires distributed across OECD countries in recent years. Sources include:

  • Survey of Trends and Recent Developments in Financial Education in Europe (with detailed responses from 12 countries);
  • Survey of the Implementation of National Strategies for Financial Education (2013 and 2014 updates);
  • Other OECD reports and documents including publications on the implementation of national strategies for financial education, and a further report on financial education among young people;
  • Desk research and bilateral contacts with member countries;
  • Preliminary results from the 2015 OECD/INFE survey on financial literacy and inclusion for European countries.

Overall the report includes 48 countries, and is structured over three chapters:

  1. Background challenges and issues demonstrating the rationale for financial education in Europe.
  2. Policy responses on financial education, including European Union responses as well as national responses such as national strategies for financial education and applicable financial education programmes.
  3. Policy and practical recommendations and examples of good practice.

Key findings:

The report highlights a number of trends and influences that have stimulated European financial policies over the past two decades. These factors include population ageing and pension reforms, increasing consumer debt and vulnerability to over-indebtedness, an increasingly complex financial sector and financial exclusion among particular groups, often set against a backdrop of low financial literacy.

  • Of the 48 European countries covered in the report, over one-third are developing, have implemented or are revising a national financial education strategy.
  • Many of the countries included employ a broad range of channels to provide information on financial issues that consumers may face. These include websites, online toolkits, awareness campaigns, financial literacy days etc. They often specifically address people who are not fully financially included, such as young people or people from different countries. These channels often work in tandem with consumer protection initiatives such as financial product comparison tools.
  • Often financial education schemes target more focused groups, particularly vulnerable groups. These interventions may reach people when they most need financial information, knowledge and skills, money management (particularly for people on low incomes) or information on debt management.
  • A large part of the national efforts is devoted to financial education among young people, with the aim of upskilling them and increasing their financial knowledge, to face financial issues that are imminent as they progress beyond the education system.

Policy and practical recommendations

  • Design national financial education strategies, following OECD guidelines, where they do not already exist.
  • Collect and disseminate further evidence through surveys on adult financial literacy, as well as performing evaluations on financial education programmes to see ‘what works’.
  • Establish solid governance mechanisms to implement financial education policies and effectively coordinate all stakeholders.
  • Strengthen delivery mechanisms by devising new delivery channels ensuring all people are reached.

Points to consider:

Relevance:

  • This report is relevant to all stakeholders and policymakers with an interest in implementing and modifying national strategies for financial education and financial literacy. In particular, those looking to develop or influence policy frameworks, programmes and strategies in these areas may benefit from reading this report.

Generalisability/ transferability

  • The research is designed to be universal and applicable throughout the European countries included. However, there will obviously be some areas that are of less importance to people in the UK.
Contact information

OECD Flore-Anne Messy