Open Editor’s Digest for free
FT editor Roula Khalaf picks her favorite stories in this weekly newsletter.
The last part of this article FT’s Financial Literacy and Inclusion Campaign
According to an OECD report, teenagers in rich countries lack the financial literacy and math skills needed to prepare them for the digital economy.
Despite increasing interest in cryptocurrencies and opening bank accounts, the majority of 15-year-olds in the Pisa study Published on ThursdayDifficulty understanding key financial terms and calculating the fifth percentile was difficult.
Experts say this underscores a continuing gap between young people’s financial literacy and the increasingly wide range of products they are exposed to online.
„There is a moving target based on the skills needed to achieve basic financial literacy,” said OECD Director of Financial and Institutional Affairs Carmine de Noya. “These are uncharted territories. Ten years ago we wouldn’t have talked about crypto or AI or finfluencers [financial influencers].”
The study examined the relationship between teenagers’ financial literacy and their performance in math and reading, as well as their money experiences, habits, and exposure to financial literacy at home and school.
In 14 OECD countries out of 20 countries surveyed – including the US, Italy and the Netherlands – an average of 18 per cent of teenagers had difficulties using the division to manage their finances.
These low-performing students struggled with everyday spending decisions, such as calculating whether it was better value to buy tomatoes by the box or by the kilogram.
The report found that while two-thirds of teenagers in 14 OECD countries are financially active and have opened bank accounts, 36 percent of those surveyed feel confident reading bank statements.
The four countries that first participated in the Pisa trial in 2012, the United States, Italy, Spain and Poland, have seen limited progress in financial literacy.
In each of the four countries, more than one in seven students still lack basic money skills, based on 2022 findings.
Meanwhile, 11 percent of students from the 20 countries involved could solve complex money problems, identify transaction costs, or understand the differences between types of investments.
The report urged countries to implement a financial literacy strategy and improve education in schools, highlighting the importance of strong consumer protection structures and educating parents.
According to a study published by the OECD last year, only a third of adults are financially literate.
Karen Holland, founder and author of the Gifting Sense financial literacy program, said parents have an important role in teaching children „powerful and sticky life skills” such as thinking before buying. „The gold standard is a combination of parents and schools that nurture their money habits and beliefs,” he added.
Only 14 of the 38 OECD countries participate in headcount tests in maths, reading and science.
The UK is one of the countries that has stayed away, as most of the variation in student performance is explained by maths achievement, which policymakers argue has limited value.
Charities like FT’s Financial Literacy and Inclusion Campaign (Flic) Parliamentary groups such as the Education Committee and the UK have recommended that financial education should be improved and that the UK participate in the 2025 assessments.
John Jerrim, professor of education and social statistics at University College London, said the UK had moved away from financial literacy assessments to ease the burden on reluctant schools, creating a „huge data gap”.
„We don’t know enough about financial literacy in this country,” he added. „These are important skills that children need to know.”