In a geopolitical environment dominated by uncertainty and rising inflation, Italians are saving with increasing difficulty and insecurity. Financial education becomes a key component of a healthy economic recovery, based on informed choices about investments and savings.

What is financial education

Financial education is the process by which consumers improve their understanding of financial products and notions and, through information and education, develop the skills and confidence to become more aware of financial risks and opportunities, make informed choices, understand who to seek advice from, and implement other effective actions to improve their financial well-being.

But first there is financial literacy, which is concerned with developing knowledge, basic or advanced. This is because financial education does not aspire to “educate,” but rather to accompany people toward more informed choices.

The areas covered are many: budgeting, debt, protection, retirement, investment, and generational transition. Topics that concern everyone, regardless of age, gender or economic conditions, and that find different applications in practice because they concern events and phases of life that each of us experiences.

The Italian scenario shows the transversality of the topic through the example of the silver segment, the over-65s, who despite being the largest savers, do not approach investments because they are frightened by topics they know little about, reducing the possibility of transforming their resources into investments that can generate wealth across the board.

The situation in Europe and Italy

Today, in Italy, there is a level of financial knowledge that can and must be improved for all generations. The European Commission tells us this first, thanks to its monitoring of financial literacy levels in the EU, which sees Italy in 23rd place out of 27.

However, it must be kept in mind that only 18 percent of EU citizens have a high level of financial literacy, while 64 percent have a medium level and 18 percent a low level.

This is because there are wide differences between member states. Only in the Netherlands, Sweden, Denmark and Slovenia do more than a quarter of citizens score high on financial literacy. In addition, the results highlight the need to support financial education for women, young people the low-income and lower educated.

There is still much to be done in our country. According to the Eurobarometer Survey, Italians are deficient in understanding basic financial concepts, in the ability to calculate interest and exchange rates, and unaware of financial risks.

But we have improved compared to 2020: dle people who are informed about financial matters are increasing and there is greater use of financial planning tools, while the number of people who feel insecure about making decisions in this area has decreased.

Financial education goes digital

Digital tools are now fully means of financial management for individuals and families, who find themselves investing more independently using their computer or smartphone and having the ability to choose from a wide range of products and services. This has led to an increase in autonomous decision-making and a move away from dealing with specialized professionals, but also anxiety and impulsiveness in making choices.

The Bank of Italy in its latest survey on financial literacy and financial skills in Italy (IACOFI) introduced questions that survey digital finance skills, measured using OECD methodology by an overall indicator that aggregates three dimensions: knowledge, behaviors and attitudes in digital finance.

On a scale of 0 to 10, the overall digital finance indicator is 4.4 and, as with the European data, those who are better educated have more knowledge, the North is favored, and there is a gender gap that penalizes women.

About 70% of respondents believe that crypto assets have the same legal tender as money, and for 63% digitally signed contracts have no legal value. Finally, half of respondents are unaware that online sharing of personal information makes it possible to delineate certain individual preferences and customize business offers.

Financial education not only for young people but also for managers

The approval of the Competitiveness bill, which includes Financial Education in the teaching of Civic Education, officially brings it into schools and looks like a very important step in improving the financial skills of Italians.

Schools are the first place to obtain knowledge to make young people aware and capable of participating in the economic life of the country, but corporate welfare is also a place to develop financial education programs. These courses aim to help managers, executives and workers achieve greater well-being by developing modern and integrated support that allows companies to count on more motivated and stable resources, improving productivity. The goal of these training programs is to accompany people along the life course, help them deal with emergencies, provide the tools to face the financial future and realize their goals, in full welfare perspective.

Fundamental is the pension education offered by supplementary pension funds through training courses for companies and the role of pension funds as strategic institutional investors, which allocate large resources to support the productive fabric. These are substantial and stable investments over time that can create a virtuous circle that can generate growth for society as a whole.

Financial education and planning for the future

Increasing life expectancy and a declining birth rate are two demographic drives that are bound to change choices about private savings, insurance and retirement planning. In retirement planning, there is a prevailing attitude of “procrastination” in retirement path planning decisions, especially when there is a low level of financial literacy and knowledge of how the retirement system works.
Therefore, to come to terms with higher life expectancy, financial education takes a primary role in encouraging users to adopt long-term strategies and have a rational approach to the market.
Because through financial education we acquire the skills to turn savings into investments, investments into growth, and growth into new guarantees for the future.