Korean Adults' Financial Literacy Scores 66.8 Points... Exceed OECD Average

Bank of Korea and Financial Supervisory Service Joint
2020 Nationwide Financial Literacy Survey

[Asia Economy Reporter Kim Eun-byeol] The financial literacy scores of Korean adults have increased compared to two years ago and exceed the average of the Organisation for Economic Co-operation and Development (OECD). However, the scores of young and elderly groups were lower than the overall average. Among the youth, the percentage of respondents who preferred consumption over saving was higher than those who preferred saving. This contrasts with the middle-aged and elderly groups, where more respondents preferred saving. Among college students (including job seekers) who preferred consumption, 8 out of 10 scored below the OECD's minimum target score for financial behavior.

According to the "2020 National Financial Literacy Survey" jointly conducted by the Bank of Korea and the Financial Supervisory Service on the 29th, the total financial literacy score of Korean adults (aged 18-79) was 66.8 points, an increase of 4.6 points compared to the 2018 survey (62.2 points). This also surpassed the OECD average (62.0 points in 2019).

Financial literacy refers to the overall understanding of finance, including financial knowledge, financial behavior, and financial attitudes necessary for rational and sound financial life. The scores are calculated according to international standards (OECD/INFE).

However, the youth group (18-29 years old, 64.7 points) and the elderly group (60-79 years old, 62.4 points) scored below the overall average. By gender, men (66.6 points) and women (67.0 points) had similar scores.

By category, more than 6 out of 10 adults achieved the OECD minimum target score in financial knowledge and financial behavior, while 4 out of 10 did so in financial attitudes. The elderly were relatively weak in financial knowledge, and the youth were relatively weak in financial attitudes.

Those with high financial literacy showed relatively better ability to cope independently with crises such as unexpected expenses and income loss. Although most adults responded that they actively save (97.0%), the percentage of adults who set long-term financial goals and strive to achieve them was low (43.5%).

Among youth respondents, 34.2% preferred consumption over saving, which was higher than the 26.0% who preferred saving.

This strong tendency to prioritize consumption negatively affected financial behavior. The financial behavior score of youth who preferred consumption was 60.1 points, lower than the 63.7 points of those who preferred saving.

In particular, 8 out of 10 college students (including job seekers) who prioritized consumption scored below the OECD minimum target score for financial behavior. Among college students who preferred consumption, 76.1% scored below the minimum target, whereas among those who preferred saving, only 66.7% scored below the minimum target.

The Bank of Korea and the Financial Supervisory Service stated, "We plan to enhance the effectiveness of financial and economic education through cooperation with related organizations" and "We will strengthen early financial and economic education to foster sound financial attitudes among youth and support basic financial education to help the elderly make rational decisions."

They also emphasized, "We will strengthen financial and economic education to establish sound financial behavior such as checking financial status and setting long-term financial goals," adding, "Considering the ongoing COVID-19 situation, we will actively utilize online education and content to conduct financial and economic education."

This content was produced with the assistance of AI translation services.