The Commission de Surveillance du Secteur Financier (CSSF, Luxembourg's financial regulator) has confirmed mixed results for Luxembourg in the International Survey of Adult Financial Literacy 2023.
At a time when it is more important than ever to equip citizens with the right reflexes in terms of financial management, an OECD study has drawn up a striking observation on the level of financial culture of the 39 countries which participated in the International Survey of Adult Financial Literacy. This observation also concerns Luxembourg residents: only 53% have reached the minimum score required to be considered financially literate.
The CSSF stated, together with the ABBL Foundation for financial education, that they are calling for strengthening educational initiatives in this area.
In a context of geopolitical and environmental crisis, inflation, high interest rates and less than optimistic economic prospects, having solid financial knowledge is fundamental. Added to this are the financial difficulties experienced by a growing number of households in Luxembourg.
Faced with this situation, Claude Marx, Director General of the CSSF reaffirmed "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".
Luxembourg ranked 5th overall
The OECD/INFE carries out an international study every three years on the level of financial culture in which Luxembourg participated for the first time. The OECD defines financial literacy as the sum of financial knowledge, financial behaviour (such as following your budget, saving and planning for the long term or making thoughtful purchases) and financial attitudes (such as living day to day, spendthrift or cautious).
With a score of 63 out of 100 in financial literacy, Luxembourg ranks fifth among the 39 states that participated in this survey. However, only 53% of the Luxembourg population reaches the minimum target score of 70 points defined by the OECD to be considered financially literate and, therefore, able to make adequate financial decisions.
Note: only four countries exceed this threshold of 70 points.
In terms of financial knowledge, Luxembourg is significantly above the average of the countries surveyed; 65% of the Luxembourg population correctly answered the basic knowledge assessment questions.
Financial knowledge of young Luxembourgers below average
The level of 18-29 year-olds is more than alarming. Young adults perform below the average for young people in the OECD countries surveyed.
In a context where financial fraud attempts are increasing and becoming more and more sophisticated, the results of young Luxembourgers in terms of digital financial culture are also worrying. With a score of 52 out of 100, their result is lower than that of the entire Luxembourg population and the OECD average for the same age group.
The same trend is observed in financial well-being, which the OECD defines as a person's ability to meet current and current financial obligations, to have confidence in their financial future and to make choices that allow them to enjoy life. Young Luxembourg residents here achieve a score of 42 out of 100, which is lower than the OECD average for this age group (44).
An emergency: financial education for all
Luxembourg has had a national strategy for financial education for several years. To take into account economic and societal developments, this strategy has been updated by the CSSF and the ABBL Foundation for Financial Education and will be submitted to the Ministers of Finance and National Education in the coming weeks.
The CSSF and the ABBL Foundation for Financial Education have been working in this area for several years. The CSSF focuses above all on public awareness (through, among other things, its portal www.letzfin.lu), while the ABBL Foundation initiates training workshops for children, adolescents and adults. Furthermore, this year the Foundation launched the Money Odyssey mobile application, the content of which is in line with the recommendations of the OECD and the European Commission (financial competence framework).
The inclusion of financial education in the educational curriculum vitae of young people in Luxembourg is one of their long-standing demands. The inclusion of this measure in the coalition agreement is welcomed by both partners.
Jerry Grbic, President of the ABBL Foundation, underlined “We congratulate the government on its intention to put in place measures to improve the financial education of all citizens, in particular through basic financial education in primary and secondary schools”.
About the OECD/INFE study carried out in Luxembourg
To be able to carry out concrete projects in terms of financial education in Luxembourg, it was important to know the level of financial knowledge of the population. Luxembourg's participation in the study carried out by the OECD/INFE in this area made it possible to draw up a detailed assessment. In this context, the CSSF and the ABBL Foundation had mandated ILRES to carry out this representative survey in Luxembourg. In December 2022, 1,017 residents aged 18 to 79, including 186 aged 18 to 29, responded online. The results have now been incorporated into the overall OECD study, allowing them to be compared with those of other countries.
