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Luxembourg Falls Short on Financial Literacy: Calls for Strengthened Educational Initiatives Amid Economic Uncertainty

A Wake-Up Call for Financial Regulators and Educators in Luxembourg

A recent survey by the International Survey of Adult Financial Literacy 2023 has revealed mixed results for Luxembourg. While the country ranked fifth overall among 39 participating countries with a score of 63 out of 100 in financial literacy, only 53% of its population reaches the minimum target score of 70 points required to be considered financially literate.

The Importance of Financial Literacy in Today’s Challenging Economic Environment

With geopolitical and environmental crises, inflation, high interest rates, and uncertain economic prospects, having solid financial knowledge is more crucial than ever. Claude Marx, Director General of the Commission de Surveillance du Secteur Financier (CSSF), emphasizes the importance of financial literacy: “The ability to manage your finances effectively has always been essential, but it’s even more critical in today’s challenging economic environment. It’s vital that Luxembourg residents have the skills and knowledge to make informed financial decisions.”

Luxembourg’s Performance in Financial Literacy

  • The OECD defines financial literacy as a combination of financial knowledge, behavior, and attitudes.
  • Luxembourg scored high in financial knowledge, with 65% of its population correctly answering basic questions.
  • Young Luxembourgers aged 18-29 performed below average, achieving a score of only 52 out of 100 in digital financial culture.
  • The country’s financial well-being is also a concern, with young Luxembourg residents scoring 42 out of 100, lower than the OECD average for this age group.

Initiatives to Improve Financial Literacy

The CSSF and ABBL Foundation have been working together on financial education initiatives, including public awareness campaigns and training workshops. To address the issue, they are urging:

  • The inclusion of basic financial education in primary and secondary schools.
  • The development of a national strategy for financial education.

Jerry Grbic, President of the ABBL Foundation, welcomed the government’s intention to implement measures to improve financial literacy among all citizens: “We need to ensure that our young people have the skills and knowledge to make informed financial decisions.”

Conclusion

In light of these findings, it is imperative that financial regulators and educators in Luxembourg take concrete steps to strengthen financial literacy initiatives, particularly among young people. This will help ensure a more secure financial future for all citizens.

Methodology

The OECD/INFE study was carried out through an online survey of 1,017 Luxembourg residents aged 18-79, including 186 young adults aged 18-29. The results have been incorporated into the overall OECD study, allowing for international comparisons.