Socially Disadvantaged Groups Have Insufficient Financial Knowledge // ZEW Study on financial education in Germany: who is financially literate and who isn’t

ZEW Study on financial education in Germany: who is financially literate and who isn't?

Around 62 per cent of German households are able to correctly answer basic financial literacy questions. In contrast, those who did not finish secondary education or vocational training (37 per cent), women (55 per cent) as well as East Germans (55 per cent) demonstrate below-average financial literacy. And yet, financial literacy helps when making financial decisions: those with higher financial literacy are less likely to experience financial difficulty and are more willing to invest in the stock market. These are the results of a study conducted by ZEW Mannheim based on approximately 4,000 respondents from the fourth wave of the Panel on Household Finances (PHF) from the Deutsche Bundesbank.

"On the international stage, Germany performs relatively well on average in financial literacy metrics. However, there are still many demographic groups in this country who are not well-versed in financial topics. At the same time, financial literacy strongly correlates with financial well-being and the willingness to take part in the stock market. Those with more financial knowledge are less likely to report being affected by financial difficulties," explained Tabea Bucher-Koenen, leader of ZEW's "Pensions and Sustainable Financial Markets" Research Unit.