More than two-thirds of students regularly use financial products and services, but levels of financial literacy remain too low to ensure they can all avoid financial risks while benefiting from available opportunities, according to a new OECD report.

The OECD says that the Government should seek to boost young people’s financial literacy, enabling them to better understand key financial concepts, and the risks and rewards of financial products. Improving financial literacy will not only bring short-term improvements to students’ money management but will also help them take smarter financial decisions as they grow older.

The PISA 2022 Volume IV financial literacy assessment, which measured the financial skills of 15-year-olds in 14 OECD and 6 partner countries and economies, shows that many students engage in basic financial activities from a young age. On average, more than eight in ten students have bought something online during the last 12 months and 66% of students made a payment using a mobile phone. However, many still lack the skills and knowledge needed to make sound financial decisions: nearly one out of five students on average in participating OECD countries and economies, did not achieve baseline proficiency levels in financial literacy.

The top performers, about 11% of OECD students assessed, are capable of solving non-routine financial problems and can describe the potential outcomes of financial decisions, showing an understanding of the wider financial landscape, such as income tax. Higher financial literacy is associated with more responsible financial behaviours, such as having a longer-term and more pro-active approach to money. Financially literate students are more likely to save, less likely to overspend and less likely to report buying something because their friends did.

OECD Secretary-General Mathias Cormann said “These results, combined with the increased incidence, complexity and potential impacts of financial frauds and scams, highlight the need to better equip our young people with the knowledge and skills necessary to make safe and informed financial decisions.

 “We are keen to broaden the coverage of this assessment to help inform countries’ financial education policies and strategies with robust evidence, to ensure their education systems are as effective as they can be, including to prepare young people for their financial future.”