The financial acumen of Australian 15-year-olds has fallen significantly since 2012 according to an Organisation for Economic Co-operation and Development (OECD) study which surveyed nearly 15,000 school students.
The OECD's Programme for International Student Assessment (PISA) also found that girls outperform boys in financial literacy and that, while both genders' understanding of financial matters has declined, boys are falling faster than girls.
The study also found that low socio-economic status students and indigenous students lag a long way behind others in their financial literacy. The results for indigenous students are particularly concerning as their performance has fallen much faster than the general population of 15-year-olds.
The PISA study compared students' financial literacy in 2015 to an earlier study in 2012 and assessed their knowledge of personal finances and their ability to deal with financial issues.
The study was carried out in Australia by the Australian Council for Educational Research and CEO Geoff Masters said the decline in financial literacy was in line with the fall in 15-year-olds' ability in maths and reading, which was revealed in another PISA report last December.
In 2015 Australian students scored an average of 504 points in the PISA test, down from 526 in 2012. But in the latest test students in the lowest socio economic quartile scored 454 and indigenous students scored only 411.
Even though the financial literacy of Australian students is declining, Australia still performs above the OECD average and outperforms countries such as the United States, Poland, Italy and Spain. But many countries with high performing students who do very well in the PISA reading and maths tests – such as Finland, South Korea, Japan and Singapore – are not included in the financial literacy test.
The Australian PISA test was assisted by funding from the Australian Securities and Investments Commission. ASIC deputy chair Peter Kell said it indicated "that there is more to be done in Australia to build financial literacy and capability at all levels of education".
This article was originally published by the Australian Financial Review on 24 May 2017. It represents the views of the author only and does not necessarily reflect the views of AMP.
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