The literacy gap that is holding Europe back

Fact

Financial literacy month originated in the United States, where it received official recognition in 2004. The objective was to bring structured attention to financial knowledge and awareness. April has since grown into an international focal point, embraced by governments, regulators, and financial institutions across Europe and beyond. Not as a marketing initiative, but as an annual benchmark for assessing financial resilience.

Financial literacy is not simply about knowing what interest rates or inflation are. It is about confidence. And about the sense of control over decisions that increasingly carry long term consequences.

Why financial literacy resonated now

The prominence of financial literacy on the European agenda today is not coincidental. On September 30, 2025, the European Commission published its EU financial literacy strategy, a comprehensive framework positioning financial education as a core component of the broader Savings and Investment Union. The objective is clear: to enable citizens to make better informed financial decisions and to more effectively direct private savings toward productive investment. (1)

That ambition is well-founded. Europe faces substantial investment needs, while significant private capital remains idle. Without adequate financial knowledge and confidence among citizens, that capital will not be mobilized. The European Commission frames financial literacy not merely as an educational objective, but as a structural precondition for well functioning capital markets.

How is financial literacy measured?

Financial literacy is not a single skill it is a combination of three elements: knowledge, behaviour and attitude towards money. This definition, developed by the OECD, forms the basis of the Flash Eurobarometer 525, the first EU-wide survey on financial literacy conducted in spring 2023 among 27 member states.

To assess financial knowledge, respondents answered five questions on key topics such as investment risk, inflation, diversification, interest and bond prices. Those who answered at least three correctly were considered financially knowledgeable, in line with international standards. (6)

However, understanding financial concepts alone is not enough. The study also looks at financial behaviour, such as whether people track their spending, plan ahead and make thoughtful financial decisions. Both knowledge and behaviour are given equal weight in the overall financial literacy score. (2)

Using this combined measure, 18% of EU citizens score high in financial literacy, 64% medium, and 18% low, with noticeable differences between countries. (7) Financial literacy has accordingly been incorporated as an explicit pillar of the Savings and Investment Union. (2)

What Dutch performance data tell us

The Eurobarometer data also provides a country level perspective on the Netherlands and the picture is more nuanced than it initially appears.

The Netherlands ranks among the top performers in the EU, alongside Denmark, Slovenia and Sweden: 28 percent of Dutch respondents achieve a high level of financial literacy. (2) That places the Netherlands well above the EU average of 18 percent.

However, context matters. Even in the best performing country, more than70 percent of the population does not reach a high level of financial literacy. The Eurobarometer also identifies a structural pattern visible in the Netherlands as well: younger individuals and those with lower income or educational attainment consistently score below average. Furthermore, respondents' self assessed financial knowledge is consistently higher than their demonstrated knowledge, people overestimate what they know. (2)

This is not a cause for pessimism. It is an indication of where targeted intervention can be most effective.