It might be the age of bitcoin, cloud, and virtual reality – but new research suggests students cannot understand even basic financial literary.
According to a test carried out by the latest OECD Programme for International Student Assessment, about one in four students are unable to make simple decisions on everyday spending, while only one in 10 can understand complex issues such as tax.
Some 48,000 15-year-olds took part in the test, which evaluated the knowledge and skills of teenagers around money matters and personal finance, such as dealing with bank accounts; understanding interest rates on a loan; or mobile payment plans.
“Young people today face more challenging financial choices and more uncertain economic and job prospects given rapid socioeconomic transformation, digitalisation and technological change,” said OECD secretary-general Angel Gurría.
“However, they often lack the education, training and tools to make informed decisions on matters affecting their financial well-being.
“This makes it even more important that we step up our global efforts to help improve the essential life skill of financial literacy.”
Financial literacy
The gender gap in financial literacy is much smaller than in reading or mathematics. Only in Italy do boys perform better than girls, while girls do better than boys in Australia, Lithuania, the Slovak Republic and Spain.
Better off students scored much higher than less-advantaged ones. Native-born students also performed better than immigrant students with similar socioeconomic status, particularly in Belgium, Italy, the Netherlands and Spain.
On average, 64 per cent of students across the OECD earn money from some formal or informal activity, such as working outside school hours or doing occasional informal jobs. About 59 per cent of students receive money from an allowance or pocket money.
The survey also revealed that, on average, 56 per cent of students hold a bank account, but almost two out of three students do not have the skills to manage an account and cannot interpret a bank statement.
