Financial Education for Long-term Savings and Investments: Review of Research and Literature

Selected studies on finance, insurance and private pensions policy prepared for dissemination in order to stimulate wider discussion and further analysis and obtain feedback from interested audiences. The studies provide timely analysis and background on industry developments, structural issues, and public policy in the financial sector. Topics include risk management, governance, investments, benefit protection, and financial education. Previous papers addressing these policy issues are available via http://dx.doi.org/10.1787/19936397.

Long-term savings and investments (LTSI) by individuals enhances their financial security while also
supporting growth and financial development. Evidence shows that financial knowledge and skills are positively
related to LTSI behaviour, and indicates a strong correlation between levels of financial literacy and retirement
wealth accumulation. However, both the quantity and quality of LTSI are often worryingly low, pointing to an
important role for financial education to increase levels of financial literacy and thus improve LTSI among
individuals.
Evaluations of various types of financial education aimed at increasing LTSI have identified some promising
results. Initial findings suggest the need for additional, targeted evaluation of education programmes to compare
the effects of different delivery channels and the intensity of provision in order to identify optimal approaches.
More detailed research is also important to fully understand why some evaluations indicate mixed outcomes from
certain programmes.