Teens lack financial literacy and maths skills for digital economy, OECD report finds

A teenager holding banknotes and a credit card

This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign

Teenagers in rich countries lack the financial literacy and maths skills needed to prepare them for the digital economy, according to an OECD report.

Despite growing numbers opening bank accounts and showing an interest in cryptocurrencies, the majority of 15-year-olds in the Pisa study, published on Thursday, struggled to understand key financial terms and a fifth found it difficult to calculate percentages.

Experts say this underlines a persistent gap between young people’s financial knowledge and the increasingly vast range of products that they are being exposed to online.

“There is a moving target in terms of the skills that are needed to achieve basic financial literacy,” said Carmine Di Noia, OECD director for financial and enterprise affairs. “These are uncharted territories. Ten years ago we wouldn’t have talked about crypto or AI or finfluencers [financial influencers].”

The study explored the links between teenagers’ financial literacy and their competency in maths and reading, as well as their money experiences, habits and exposure to financial literacy at home and in school.

Across the 14 OECD countries within the 20 nations surveyed — including the US, Italy and the Netherlands — an average of 18 per cent of teens had difficulties using division to handle their finances.

These low-performing students struggled with everyday spending decisions, such as calculating whether buying tomatoes by the box or kilogramme was better value.

The report also found that although about two-thirds of teens in the study were financially active and had opened bank accounts, just 36 per cent of those surveyed were confident about reading bank statements.

There has been limited improvement in financial literacy in the four countries — the US, Italy, Spain and Poland — that have taken part in the Pisa test since it first began in 2012.

In each country, more than one in seven students still lacks basic money skills, based on the 2022 findings.

Meanwhile, just 11 per cent of students from all the nations involved could solve complex money problems, spot transaction costs, or understand the differences in 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 frameworks and educating parents.

Only a third of adults are financially literate, according to research published by the OECD last year.

Karen Holland, a teacher and founder of the Gifting Sense financial literacy programme, said parents had an important role in teaching children “powerful and therefore sticky life skills” such as thinking before they buy. “The gold standard is a combination of parents and schools developing their money habits and beliefs,” she added.

Only 14 of the 38 OECD countries that take part in the headline Pisa tests on maths, reading and science participate in the financial literacy assessments.

The UK is one of the countries that has opted out, with policymakers arguing it has limited value as most of the variation in pupil performance is explained by maths attainment.

Charities such as the FT’s Financial Literacy and Inclusion Campaign (Flic) and parliamentary groups such as England’s education committee have said financial education needs to be improved and recommended the UK take part in the 2025 assessments.

John Jerrim, professor of education and social statistics at University College London, said the UK had opted out of the financial literacy assessment to reduce the burden on reluctant schools, creating a “big data gap”.

“We really don’t know enough about financial literacy in this country,” he added. “These are absolutely key skills that kids need to know about.”