Financial education in Germany: Alarming gaps among young people!

Financial education in Germany: Alarming gaps among young people!

A huge topic is spilling over the map of German finance: financial education. The current figures show that only a third of Germans (30%) claim that their financial knowledge is high. What is particularly alarming is the increasing level of debt among the population, especially among young people. Poverty in old age and financial hardship are often the result of inadequate financial knowledge. So reported daily news that Germany is above the OECD average in financial education, but with one important caveat: the tasks in current studies are too simple and do not reflect the necessary skills.

Numbers don’t lie – or do they? Professor Carmela Aprea points out that just 36% of men rate their financial knowledge as good or very good, while only 23% of women share this opinion. Unfortunately, the reality for young people is even more pressing: a fifth of 14 to 29 year olds are in debt, and less than a third of 17 to 27 year olds feel well informed about retirement planning.

The need for national recovery

In the context of this issue, a petition was launched to encourage Germany to participate in the voluntary financial module of the OECD PISA study. Over 65,000 signatures have already been collected to send a strong signal for early financial education in schools. The existing situation becomes even clearer: older people have, on average, more debt than their younger colleagues, while younger people often become dependent through consumer debt.

A poignant analysis also came from Federal Ministry of Finance, which was released on May 13, 2024. This shows that although financial literacy in Germany is good compared to other countries, there are large gaps in certain subject areas and population groups. In particular, groups suffering from financial hardship, such as low earners or immigrants, are often not included in financial education initiatives.

Initiatives and outlook

The financial education initiative, launched by Federal Finance Minister Christian Lindner and Education Minister Bettina Stark-Watzinger, calls for a national financial education strategy to be presented in autumn 2024. This strategy is intended to take into account experiences and recommendations from the OECD in order to address the need for action on issues such as pension provision, capital market participation, responsible use of credit and the safe use of digital financial services.

A key factor remains the assumption that financial education should be taught more not only in school textbooks, but also beyond. The Finanztip Foundation is committed to providing schools with free teaching material - a good first step towards strengthening the financial knowledge of future generations.

Will Germany take the step towards a better financial future? One thing is certain: with a concentrated will to improve financial education, living costs could be reduced and financial investments could be optimized. It remains to be hoped that young people will take the right path and not just rely on loan offers from now on.