From financial literacy to retail investment: a comparative playbook for the EU Savings and Investments Union

People who know more about finance are more likely to invest. This CEPS-ECMI-ECRI In-Depth Analysis report confirms this through household microdata from Spain (ECF 2021) and the Netherlands (DHS 2022), and reviews public and private measures in 10 EU Member States. In Spain, the share of adults holding investment funds or listed shares rises from 8% among those who answer none of three standard financial literacy questions correctly to 36 % among those who are able to answer all three. In the Netherlands, it rises from 5% to 35%. This also holds after socio-economic controls in both countries, despite their very different pension systems.

Understanding diversification matters most. Women invest less and some of the gap reflects uncertainty rather than mistaken beliefs: women answer ‘do not know’ more often, while their actual share of incorrect answers is similar to male respondents. Tested and self-assessed knowledge both matter and are not interchangeable.

The country review shows that delivery matters more than labels: a national strategy or a curriculum requirement does not guarantee that pupils are actually taught what they need to know. Simpler administration and tax incentives are separate decisions. Simplification costs little and should be encouraged on its own merits; incentives should be justified by additional saving or new investors.

Judith Arnal is Associate Senior Research Fellow at CEPS and ECRI (the European Credit Research Institute). 

This CEPS-ECRI-ECMI In-Depth Analysis was funded by the Broadridge European Financial Literacy and Retail Empowerment Research Grant.