Nowhere else in the world can adults deal with finances as well as in Germany: both pure financial knowledge on basic issues and the financial behaviour and attitude towards money are comparatively well developed in this country, reports the Organisation for Economic Co-operation and Development (OECD) in a study on basic financial literacy in 39 countries.

On average, people in the Chinese Special Administrative Region of Hong Kong know slightly more than German citizens when they have to answer seven simple questions about interest rates, inflation and risk diversification. According to the respondents, financial behaviour, i.e. the responsible handling of money, is somewhat better developed in Saudi Arabia than in Germany, which is roughly on par with Ireland. If the proportion of those who achieve the required minimum level is recorded, Germany ranks second in both categories.

In the overall ranking, however, Germany is by far the leader. The respondents scored 76 points out of a possible 100. Thailand follows in second place with 71 points, followed by Hong Kong and Ireland with 70 points each.

Just over a week after the OECD's Pisa test gave German pupils a mediocre report card in reading, mathematics and science, the organisation attests that most adults in Germany have comparatively solid financial skills. The report is backed by the International Network on Financial Education (INFE), which is based at the OECD. In the previous study from 2020, Germany was ranked fourth, behind the leader at the time, Hong Kong, but also behind Austria and Slovenia, which are missing from the study this time.

For financial professionals, the OECD's questions in the "financial knowledge" category seem surprisingly simple. However, many people are overwhelmed across all countries. In Germany, 85% of respondents answered at least five of the seven questions correctly, but only 50% of respondents across all countries managed to do so. The OECD states that politicians must continue to strengthen basic financial knowledge.

In Germany today, almost everyone knows that inflation goes hand in hand with the rising cost of living. The vast majority also knows that investing money with high returns is probably very risky. And almost three-quarters understand the effect of compound interest in an example calculation for a bank account. Germans are slightly more confident here than they were three years previously.

The German financial supervisory authority BaFin surveyed more than 1,000 people by telephone for the study on behalf of the OECD in September and October 2022. The regulator published some of the results in April. "There is room for improvement regarding financial knowledge in Germany," was the financial regulator's verdict at the time. However, the gaps are greater in other countries, as is now apparent.

According to the OECD, "financial behaviour" in Germany is also better than in many other countries. Relevant here is whether the people surveyed take their financial matters into their own hands or leave them to others, whether they have actively saved in the past twelve months, whether they have recently been able to cover their expenses with their income, whether they seek advice on the selection of financial products and whether they plan their finances for the long term.

The OECD also rates attitudes towards money in Germany rather favourably. On a scale of one to five, respondents were asked to answer whether they are happy spending money instead of saving it long-term and whether they live in the here and now instead of planning for tomorrow. German citizens rarely agree with these statements – a healthy attitude in the view of the OECD experts. In the overall ranking, this question carries slightly less weight than knowledge and behaviour.

Overall, both European and Asian countries can be found in the top group. In addition to Germany (76) and Ireland (70), Luxembourg (68), Malta (68), Estonia (67), Sweden (66) and Finland (65) are also further ahead, while in Asia, Korea (67) scores well alongside Thailand (71) and Hong Kong (70). By comparison, all countries scored an average of 60 points.

Bringing up the rear is the civil war-torn country of Yemen (42). In Asia, Cambodia (49) is at the bottom, in Latin America Paraguay (50) and Panama (55) score poorly, and other countries in South and Central America also rank mediocre at best. The USA and Canada are missing from the study.

In Europe, Italy (53) and Romania (54) stand out with low scores. A number of European countries are just above the survey average, including Greece (61), France and Poland (both 62), Spain and the Netherlands (both 64).

Even though Germany scores well overall, many people in this country are falling behind. BaFin, which analysed the results specifically for Germany, warns of a skills gap: the difference is particularly large when a distinction is made between levels of education, as the financial supervisory authority breaks down.

Unlike the OECD, however, BaFin uses ten and not seven questions for the assessment: on average, people with a high school diploma, master craftsman's certificate, technical college degree or university degree achieve 8.5 correct answers, while respondents without a high school diploma, with a lower secondary school diploma or an apprenticeship give 7.1 correct answers. Income also plays a role: the more money respondents earn per month, the better they score. Internationally, the level of education and income also have a significant effect, reports the OECD.

In addition, people in Germany over the age of 60 give fewer correct answers than younger people. In the OECD's cross-national comparison, however, age hardly plays a role.

The study also shows a difference between the genders: out of ten selected BaFin questions, men answer an average of 8.4 questions correctly, while women give 7.6 correct answers. BaFin does not break down whether the gap is actually statistically linked to gender or whether the age and level of education of women are the decisive factors here. The OECD also found a gap between the genders across all financial literacy categories, but this was small at less than 2 out of 100 points.

Germany is not only well ahead in the overall index but also in other categories that were recorded separately. For example, the OECD asked about the financial situation (financial well-being), which goes beyond mere competence. This includes, for example, whether existing money reserves last for at least three months, whether there is money left over at the end of the month, whether any debts are perceived as too high or whether respondents have to do without essential things.

Germany is ranked first with 73 out of 100 points, while Hong Kong and Ireland, which are also well ahead in financial literacy, achieve high scores of 61 and 58 points and are ranked second and third, respectively. Poorer countries, on the other hand, fall behind. Yemen is also at the bottom here, with 15 points.

A similar picture emerges for digital skills: The proportion of people achieving the minimum level required by the OECD is higher in Germany than in most other countries, at just over half. For example, the experts wanted to know how careful respondents were with passwords and personal information and how cautious they were when using publicly accessible Wi-Fi networks. Hong Kong and Ireland are slightly ahead of Germany. Only people with an internet connection were surveyed there. Estonia, France, Brazil and Finland also scored well in this category, while Indonesia, Albania and Korea lagged behind.

It is fitting that Germans state comparatively rarely that they have been victims of financial fraud: While close to 15% of people across all countries report this, the figure in Germany is only around half as high. According to the survey, there are exceptionally high numbers of fraud victims in the Philippines, Costa Rica, Brazil, Peru, and Panama. In Europe, Estonia has a high fraud rate. In Saudi Arabia, Hungary, and Croatia, there is little financial fraud.

The study also touches on sustainable investment. Almost 15% of Germans claim to own a sustainable financial product, while the international average is less than 3%. Furthermore, most people in Germany are aware that such financial products exist.

Meanwhile, the debate about a lack of financial education is gathering pace in Germany. The Federal Ministries of Finance and Education are taking up the issue. In March, Finance Minister Christian Lindner and Education Minister Bettina Stark-Watzinger (both FDP) announced an initiative to bundle and connect offers and strengthen research on the topic.

Taiga Brahm, Professor of Economic Education and Economic Didactics in Tübingen, warned a few days ago in an interview with Börsen-Zeitung that financial education is not important enough in German curricula. "A lack of competence can lead to poverty in old age or higher levels of debt," she said.

The OECD study does not conceal the gaps in knowledge in Germany either. However, the problem is bigger almost everywhere else in the world than in Germany.