Financial Crime World

Luxembourg Struggles with Financial Literacy Despite High Scores

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A recent study by the OECD International Network on Financial Education (OECD/INFE) has shed light on Luxembourg’s financial literacy, revealing both positive and negative trends.

Overall Financial Literacy

The country ranked fifth out of 39 states in overall financial literacy, but only 53% of adults reached the minimum target score defined by the OECD to be considered “financially literate.”

Financial Knowledge

Luxembourg scored well in terms of financial knowledge, ranking 10th out of 39 countries with an average score of 71.

  • However, when looking at just adults aged 18-29, only 57% reached the minimum target score, below the OECD average and ranking 24th.

Financial Behaviour

Luxembourg’s financial behaviour scored better than the OECD average, with 67% of adults displaying good financial habits such as active saving and long-term planning. However, there was room for improvement in keeping track of money in the short term, where Luxembourg fell below the OECD average.

Financial Attitudes

The study also explored financial attitudes, revealing that:

  • 57% of adults disagreed with the statement “I tend to live for today and let tomorrow take care of itself,” 13 percentage points lower than the OECD average.
  • 60% of respondents reported having money left over at the end of the month.

Additional Findings

Other findings from the study include:

  • Luxembourg ranked second in terms of sustainable finance products, with 6.8% of adults holding such products.
  • The country had the highest percentage of population holding credit products, with 84% of respondents reporting ownership.
  • 15% of adults in Luxembourg reported being victims of financial fraud or scams.
  • 89% of respondents disagreed with sharing bank account passwords and pins with close friends.
  • A high percentage of Luxembourgers transferred money online (91%) and held cryptoassets (10.8%).

Call to Action

The findings have prompted a call for better educational initiatives from the Financial Sector Surveillance Commission (CSSF) and the Luxembourg Bankers’ Association (ABBL) foundation for financial education.

As CSSF director general stated, “If benefiting from good reflexes in terms of managing your money on a daily basis has always been essential, it is all the more true at present.”

Conclusion

The report highlights the importance of improving financial literacy among Luxembourgers, particularly younger adults, to better navigate the complexities of personal finance and make informed decisions about their financial future.