G20/OECD INFE report on adult financial literacy in the G20

1. Context
2. The study
3. Key findings
4. Points to consider

• Context
• The study
• Key findings
• Points to consider
• Full report

Context

Financial education is becoming increasingly recognised by the international policy agenda. The establishment of tree sets of high-level principles relating to financial education, endorsed by the G20 leaders over the past few years reflect this. Additionally, in 2016 a new set of digital financial inclusion principles were formally adopted. One of the principles recognises the importance of financial literacy competencies to allow consumers to take advantage of increasingly digitalised financial advice and products.

The study

This report responds to a call from G20 leaders in 2016 to coordinate data collection on levels of financial literacy across the G20 countries. With the G20 recognising financial literacy as an ‘essential life skill’, this report seeks to explore and explain the extent of financial literacy throughout the G20 countries.

The OECD asked all G20 countries (plus the Netherlands and Norway) to use their toolkit to collect data and submit data analysis on levels of financial literacy. In total 16 G20 countries and the two guest countries collected data on all or most of the core questions in the OECD/INFE (International Gateway for Financial Literacy) toolkit. These countries were:

• Argentina, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Mexico, the Netherlands, Norway, Russia, Saudi Arabia, South Africa, South Korea, Turkey and the UK.

In addition, other countries collected data using other instruments or using a hybrid of the toolkit combined with their own questions. These were:

• Australia, Japan and the United States.

The combined national survey data is used to compare the financial knowledge and attitudes of 101,596 adults aged 18 to 79 across the 21 countries.

Key findings

• Average financial literacy scores across all of the countries show there is much room for improvement, with the average score being 12.7 out of a possible 21.
  • Four countries scored above 14 points (France, Canada, China and Norway), while four countries scored below 12 points (India, Argentina, Italy and Saudi Arabia).
• Nearly all of the G20 countries had a national strategy to tackle the issue of poor financial literacy either in place, being implemented or being designed. Germany was the only exception.
• Many people were lacking basic financial knowledge, with fewer than half (48%) of adults being able to answer 70% or more of the financial knowledge questions properly.
• There was a difference of 11 percentage points between men and women with regards to achieving the minimum target financial knowledge score, with men significantly more likely to reach the target in most of the countries.
• Only three-in-five households across G20 countries (60%) were using a budget, while over a third (37%) had faced a situation in the past 12 months where their income did not cover their living costs.
• Only 15% of people across the G20 countries used independent sources to make comparisons when choosing a financial product.
• Only two-thirds of respondents overall held a specific payment product (for example a credit card), falling to just 8% in Brazil and just 2% in Indonesia (though in Indonesia most respondents did have a savings account or product).
• Almost one-in-five (19%) of the respondents across all G20 countries had turned to family and friends for financial support, rising to over half of all respondents in India (54%).
• The research found that people who held a payment product or savings product had higher levels of financial literacy than those who didn’t, a finding consistent with other research.

Points to consider

• Methodological strengths or limitations:
  • Data is weighted to ensure that all findings are nationally representative. However, data collection methods and data sources differ by country so caution is needed when comparing results.
• Relevance:
  • This report is relevant to all stakeholders and policymakers with an interest in financial education and financial literacy.
• Generalisability/ transferability:
  • While the UK is included in the research, much of the report deals with the G20 countries ‘as a whole’ so not directly relevant to the UK.

Full report

G20/OECD INFE report on adult financial literacy in the G20 - full report