OECD Recommendation on Financial Literacy
Financial literacy has become a long-term policy priority in many countries and economies and is recognised as an important complement to market conduct, prudential regulation, and financial inclusion.
Over recent decades, the financial environment has evolved, giving greater opportunities to individuals to access finance as well as manage and plan their financial future. At the same time, the financial landscape has become more complex and digital financial services have introduced new challenges and risk factors. Demographic, socio-economic and financial developments have been further compounded by the socio-economic crisis resulting from the COVID-19 pandemic. Despite the growing complexity of the financial and risk landscape, recent financial literacy surveys conducted by the OECD have highlighted that many people – especially vulnerable groups – lack even basic financial knowledge and are ill-prepared to make savvy financial decisions. Because of these challenges, policies aimed at enhancing the knowledge of financial products and their associated risks, as well as policies strengthening consumers’ financial competences, their overall financial resilience and well-being are essential, within a robust financial consumer protection framework.
The Recommendation was developed initially in the International Network on Financial Education (INFE). It updates and replaces four previous OECD Recommendations on financial education: the 2005 Recommendation of the Council on Principles and Good Practices for Financial Education and Awareness (OECD/LEGAL/0338), the 2008 Recommendation of the Council on Good Practices for Enhanced Risk Awareness and Education on Insurance Issues (OECD/LEGAL/0357), the 2008 Recommendation of the Council on Good Practices for Financial Education Relating to Private Pensions (OECD/LEGAL/0359), and the 2009 Recommendation of the Council on Good Practices on Financial Education and Awareness Relating to Credit (OECD/LEGAL/0370).
It also draws on further work on financial education developed by the OECD that has been recognised in the G20 and Asia-Pacific Economic Co-operation (APEC).
The Recommendation is open to adherence by OECD Members and non-Members. While not legally binding, practice accords it great moral force as representing the political will of OECD Members and non-Members having adhered to it (Adherents), on whom there is an expectation to do their utmost to fully implement it.