Low financial literacy does not just cause problems for people's living standards, it can affect physical and mental health.

The University of Oxford’s Saïd Business School is launching a new five-year research programme to address problems caused by a lack of financial literacy. Capital.com, a European fintech platform, has donated £1.5 million ($1.75 million) to the initiative.

A new research laboratory will be led by Dr Shumiao Ouyang, whose previous work has examined how consumers of financial products can be influenced towards healthier financial decision-making, and Professor Pinar Ozcan, lead of the Oxford Future of Finance and Technology Initiative, whose research looks into creating corporate environments that prioritise customer wellbeing.

The research will examine the causes and prevalence of financial illiteracy and provide policy recommendations for effective, data-informed financial education programmes. 

The business school defines financial literacy as “the overall health of an individual’s financial life, including their ability to attain financial security and prevent stress.”

Citing data to underscore the scope of the problem, the business school said only one third of the world’s adult population can perform basic financial tasks and be considered financially literate; in the US, more than 40 per cent of employees run out of money before their next pay date and are four times more likely to be suffering from depression and anxiety; a recent UK survey showed that nearly half the adult population suffers from “money worries,” with younger adults and ethnic minorities being more severely affected; the situation is even starker in developing countries.

“Lack of financial education doesn’t just affect people’s wallets – it takes a toll on their mental and physical health and limits their ability to plan for the future,” Professor Ozcan said. 

The Oxford team will work with experts from Capital.com, whose client trading volumes exceeded $1.7 trillion in 2024. Viktor Prokopenya, Capital.com’s founder, said: “Capital.com’s mission has always been to help people make better financial decisions by giving them the tools, resources and education they need to save, invest and trade with confidence. My life was transformed after learning financial skills and I hope this partnership with the University of Oxford can create new solutions that can have a similarly transformative impact on the lives of others."

The team will also work together on data analysis to create new features and games aimed at developing investors’ financial skills. These interventions aim to reduce financial vulnerability, enhance consumer confidence, and contribute to the development of more resilient economies.

A team of five academics and a communications manager will work on two research themes: behavioural finance, and corporate social responsibility. 

The behavioural finance theme will be led by Dr Ouyang, and the CSR area will be led by Professor Ozcan.