In November 2016, Allianz, in collaboration with Director Annamaria Lusardi, surveyed a total of 10,000 (approximately 1,000 people in each country) in the western European countries of Austria, Belgium, France, Germany, Italy, the Netherlands, Portugal, Spain, Switzerland, and the United Kingdom to better understand their financial and risk literacy and financial decision making.
The relationship between financial literacy and relevant financial outcomes (borrowing and investing behavior and planning and saving for retirement) is well documented in the academic literature. This current study goes further by adding questions relating to risk concepts. It also examines the extent to which people who have a good understanding of financial and risk concepts are also better at recognizing the right financial product for a specific financial need in real-life situations. The results of the survey show low financial and risk literacy levels across all countries. Concepts related to risk are particularly difficult for people to grasp; many respondents indicated they did not know the answer to the risk literacy questions. The analysis of the three financial scenarios yielded the same sobering results as the findings about the financial and risk literacy questions. A quarter of Europeans were unable to identify the correct financial solutions to even one of the three stated scenarios. Most important, the data show that people with a good grasp of financial and risk concepts are twice as likely as those without to make better financial decisions. Women and Millennials are particularly at risk of making poor financial decisions.
More than ten years and a financial crisis after the first waves of financial literacy surveys, the results of this study confirm little has changed.
Austria, Germany, and Switzerland top the ranking in financial and risk literacy, while France, Portugal, and Italy rank at the bottom, although similar patterns exist between countries.
Risk-related concepts are the most difficult to grasp in all countries and are the least understood, especially the concept of risk diversification.
Full content of the publication
France, Germany, Global, Italy, Portugal, Spain, United Kingdom
Youth Financial Education in South East Europe
The financial and economic consequences of the COVID-19 pandemic highlight the urgency of ensuring that young people in ...Read more
“Juntos” Conditional Cash Transfer (CCT) Financial Education Programs
The Juntos conditional cash transfer (CCT) program began in 2005 and is oriented exclusively to poor rural households, t...Read more
The Effect of Financial Education on Downstream Financial Behaviors
Economic importance of financial literacy is documented in a large and growing empirical literatureRead more