- Finland is close to the OECD average in its national level of financial literacy. Younger Finns aged 18 to 29 years have weaker financial literacy than their seniors. A higher level of education correlated with a higher level of financial literacy. Entrepreneurs were financially more literate than the adult population on average.
- The survey also measured digital financial literacy and insurance literacy.
- Finland has drawn up a national strategy for financial literacy, setting the objective that Finns will have the world’s best financial literacy by 2030. Finance Finland supports the aims of this national strategy.
The survey was commissioned by the Finnish Ministry of Justice and conducted by the University of Vaasa and Pellervo Economic Research PTT. It applied the toolkit for measuring financial literacy and financial inclusion designed by the OECD International Network on Financial Education (INFE) to enable international comparison. The full-scale comparative international analysis will be published in November 2023. The Finnish results were now compared with OECD data compiled in previous survey rounds.
The recent survey measured Finns’ financial literacy in three areas:
- Financial knowledge
- Financial behaviour
- Financial attitudes
Financial knowledge was measured with questions about risk diversification, inflation and interest. Financial behaviour was measured with questions about things like household budgeting and planning and the management of expenses. Financial attitudes were assessed with statements that described different attitudes towards money management.
On average, men scored higher than women on financial knowledge in the survey. However, women received higher scores in financial behaviour and attitudes. As a result, there was no noticeable gender difference in the overall financial literacy scores.
The level of financial literacy was influenced especially by the age and educational level of the respondents. Financial literacy generally increased with years of education. Younger respondents generally had the lowest financial knowledge and performed below average also in the other areas of financial literacy. The level of financial knowledge was the highest in the age group 40–49 years.
There was one area, however, that the younger respondents did excel in: financial behaviour. “Young adults have very little money to spend. Their conservative financial behaviour may therefore be dictated by necessity. If you have more money at your disposal, you can also afford more relaxed habits”, said Professor Panu Kalmi from the University of Vaasa in an event presenting the survey results.
The survey also measured digital financial literacy, which covers, for example, the use of digital tools to manage personal finances, knowledge of consumer rights and secure use of online services. The results in this area were mostly in line with the overall level of financial literacy. Knowledge and skills were at their lowest in the age group 18–29 years and also fairly low among the respondents aged over 70 years. Digital financial literacy was the highest in the age group 40–49 years.
Little previous research on insurance literacy
The survey also assessed Finn’s skills and knowledge in matters of insurance. Two out of three respondents said they understood the coverage, contents and comparability of insurances. However, the respondents’ own perception of their insurance literacy was higher than their actual knowledge.
“When it comes to insurance, Finns can’t be blamed for low self-confidence”, said Olli-Pekka Ruuskanen, research director at Pellervo Economic Research, while presenting the survey results.
The survey included six questions on insurance. On average, the respondents answered three of the questions correctly. Only one in ten respondents knew the correct answer to all six. Finns were the most unsure when asked about the coverage of insurance policies and the use of life insurance as a savings vehicle. The respondents performed better in the question on pure risk life insurance.
There is no international data on the level of insurance literacy as of yet. Insurance literacy as a whole has been researched very little, and the studies that have been done have focused more on voluntary medical insurance and pension policies.
The performance of different respondent groups was similar as in the other areas of financial literacy – the older generations had better skills and knowledge in insurance literacy, and the youngest respondents still had much to learn.
The detailed results of the survey will be published as scientific articles at a later point. The full-scale OECD comparative international analysis, which this Finnish survey was also part of, will be published in November.
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