Surveys by the OECD and European Commission, for instance, reveal significant gaps in basic financial understanding across countries. For example, only 28 per cent of Italians grasp compound interest, and 37 per cent of Europeans understand diversification. These gaps hinder effective investment decisions and financial planning, he said. “Academic research since 2004 has shown that financial literacy positively influences stock market participation, pension planning, and savings behaviour, while reducing poor financial habits like over-indebtedness.”

A hot topic
McGill University has meanwhile launched a master of management in finance in Luxembourg, a part-time graduate-level programme designed for professionals in the financial sector. The need for financial literacy has been a topic for some time. With more people having to provide for long-term savings as state pension systems come under strain, it puts a premium on the topic.

Wilson said that financial literacy is crucial at every stage of life – early planning can significantly improve long-term outcomes, especially for retirement. “Instilling financial fluency in the curriculum is a vital step towards ensuring every child has the tools to make informed decisions and set themselves up with a strong financial foundation, benefiting both individuals and the wider economy,” Wilson said.

As the government prepares to announce further details next year, Wilson encouraged continued dialogue with businesses and charities already delivering financial education, so that an approach that is practical, inclusive and impactful can be shaped.

Nicolini also said that assessing financial literacy is complex. “While knowledge can be tested through questions on inflation, interest, and compound interest, behavioural and attitudinal aspects are harder to quantify,” he continued. He noted that financial literacy affects not only what people know but how they behave. Many individuals lack emergency savings or private pension plans, indicating financial fragility. Behavioural studies show that even when people understand financial concepts, they may not act on them due to constraints or psychological barriers. He said extending time horizons was important, especially for pension planning, which cannot be corrected once retirement approaches

Nicolini also explained that low financial literacy leads to risk aversion and missed investment opportunities. “People often overestimate risk and avoid the stock market, preferring to keep money in bank accounts. This behaviour results in lower returns and poor long-term outcomes,” he said. “Educated investors are more likely to diversify, assess risk properly, and choose better financial products. Literacy also protects against fraud and improves trust and engagement with financial advisors.”

Nicolini believes that improving financial literacy is a shared responsibility among consumers, regulators, and the financial industry. Clearer products, better education, and more transparent advice are needed. He emphasised that financial literacy is essential not just for individual wellbeing but for economic resilience and called for collaboration to address these challenges.

Meanwhile, , a large US-based active exchange-traded fund manager with over $850 billion in assets under management, recently launched at European level Tune Out the Noise, a documentary made for Dimensional by film director Errol Morris. The documentary, which took two to three years to create, aims to help educate people about how to invest. See more about the firm here.

In August this year, the University of Oxford’s Saïd Business School launched 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.