The European Commission and the OECD jointly presented the Financial competence framework for adults in the European Union in January 2022, as part of objective 2 of the Capital Markets Union (CMU) action plan of the EU. EAEA welcomes the initiative as a positive first step towards the promotion of financial literacy, appreciating both the detailed account of the competences presented and the opportunity to develop targeted programmes based on the most relevant competences for certain learners.
Competences related to financial literacy have a direct impact on the everyday lives of Europeans: healthy financial behaviours can empower people to reduce stress, live healthier lives and become active citizens, thus promoting well-being. It can provide a path toward social inclusion, reinforcing both the self-confidence of people and their trust in institutions.
Financial literacy, includes essential competences that are fundamental to building resilient communities, inclusive societies and robust democracies. In this process, the learner needs to be put at the centre. To make financial literacy learning effective and relevant for learners, financial literacy programmes need to start from the learner’s perspective rather than the one of banking and financial institutions or governments, since the latter may at times prioritise their own interests or present a biased account of facts.
Financial literacy programmes should value the financial knowledge and skills that adults already possess, as the starting point of their learning journey. For example, low-income households may be highly skilled in managing a small budget, while middle-income households may face difficulties regarding saving for larger unexpected expenses and financial problem-solving strategies. These can be connected to different individual and societal expectations in terms of lifestyle, such as owning a car or buying property.
The current economic crisis and rising living costs, lead to a loss of financial leeway for more and more people, putting households with lower and middle incomes at greater risk of poverty and financial vulnerability. Since the Covid-19 pandemic and the war in Ukraine, prices are rising very fast everywhere in Europe. However, wages, pensions and social benefits are not matching inflation, leaving gaps in household budgets.
Improving financial literacy skills can help people to cope with these situations, e.g. empower people to develop healthier financial habits. It can enable them to identify and make use of support mechanisms and give them the tools to critically reflect on collective financial issues and potential solutions. However, other complementary measures are essential to promote financial well-being for everyone, including financial regulation, surveillance and support. Financial literacy should, therefore, be accompanied by other interventions to guarantee decent working conditions, fair wages and effective social policies.
- Develop a coordinated, comprehensive and holistic approach to adult education and life skills, enabling effective cooperation and cross-sectoral collaborations at the European, national and local level.
- Provide learning opportunities to acquire and reinforce numeracy skills in financial education.
- Differentiate between the depth of competences, while valuing the whole spectrum of competences, for all learners.
- Make funding available for all levels of financial literacy learning.
- Critical thinking, global and sustainability skills need to be included in all financial literacy programmes as a central component.
- Develop inclusive routes for learning that can guide every adult in building, developing and progressing in their financial education.
- Embed financial literacy in strategies and programmes for social inclusion at the European, national and local levels.
- Make the framework and its implementation more inclusive, considering the condition, (learning) needs and potential of disadvantaged groups
- Close the gender gap in financial literacy and develop gender-sensitive financial education
- Address the behavioural, psychosocial and social components of financial literacy.
- Provide further training opportunities in financial literacy for trainers and adult educators, include the family learning dimension of financial literacy in the training of all school teachers and professionals working with families, and mainstream financial literacy throughout initial and continuous teacher and adult educator training.
- Fund and support academic and scientific research on financial education for adults.