These investigations are testimony to the fact that women, in particular, have some catching-up to do.Įarly educational initiatives as a solution? According to earlier OECD investigations, there's a lot of potential for improvement in many countries around the globe. "Only once they know how interest rates, for example, or products such as investment funds and insurance work, once they are able to weigh up the risks and opportunities, will they be able to get clued up and make decisions which ensure their financial wellbeing." However, as she points out, a look beyond the PISA study shows that adult financial literacy is not in good shape. We need to act, no doubt about that", says Miksa.
"It is incredible how poorly young people are equipped for modern life. On average, 15 percent of those surveyed did not even show correct basic knowledge.
A PISA study carried out by the OECD (Organization for Economic Cooperation and Development) in 2014 dug deeper for the first time and identified considerable gaps in knowledge. We have a lot of catching-up to do when it comes to young people they don't know a lot about dealing with bank accounts, credit cards, interest rates, saving, risk and revenue. A society that is not sufficiently prepared to make far-reaching financial decisions is on the brink of social problems".īeing able to make decisions to ensure financial wellbeing "In view of the demographic development and increasing tightening of state finance reins in many countries across the globe, it is essential that we make provisions for our old age ourselves. "Financial literacy is important at all stages of life", says Brigitte Miksa, head of the International Pensions team at Allianz. What is the best way to set up effective financial literacy programs? At what age should children ideally start learning about all things finance and how can they continue to do so once they become adults? Since then, the question of how we can develop financial literacy in general has been discussed again and again. Since 2008 the OECD (Organization for Economic Cooperation and Development) has been more active in promoting the issue on an international level with the help of the International Network on Financial Education. Since the financial crisis, many governments have introduced national strategies to improve the economic education of their citizens. Those unfamiliar with financial matters are more likely to take out a loan, tend to save less and generally pay higher fees for financial products. In other words: according to the demographic researchers Annamaria Lusardi and Olivia Mitchell every individual bears the costs of his or her financial ignorance.
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