OeNB Report 2024/13: International Survey of Adult Financial Literacy 2023: first results for Austria

Valentin Voith and Maximilian Zieser ¹

Enhancing financial literacy through large, coordinated efforts has become a policy priority for many countries worldwide. While the concept of financial literacy was initially regarded as a skill necessary to make sound financial decisions in one’s best interest, the 2008 financial crisis highlighted the crucial role of consumer financial literacy in ensuring financial stability (Pinto, 2016). Recent events such as the COVID-19 pandemic and Russia’s invasion of Ukraine have introduced high inflation rates paired with high interest rates, making the cost of living a major concern for a considerable proportion of households. At the same time, the financial sector has been gripped by an even more extensive wave of digital transformation, both through the mainstreaming of digital banking and investing and through technological advancements such as generative artificial intelligence.

The ever-changing economic and financial landscape thus constantly brings about new challenges policymakers need to address. Indeed, pivotal global developments, the increasing complexity of a globalized economy and a highly digitalized financial sector demand the constant evolution of financial literacy and financial education in theory and practice, while still building on a solid basis of timeless financial principles. Advancements in the field, such as the continuous refinement of the concept of financial literacy, new ways of teaching, the recognition of financial well-being as the ultimate goal of financial literacy (e.g. ANZ, 2021; CFPB, 2015; OECD, 2022a) and a heightened focus on digital financial literacy (e.g. Morgan et al., 2019), reflect the constant efforts to meet this demand.

In 2021, Austria adopted its first national financial literacy strategy. Led by the Austrian Ministry of Finance, the initiative follows a nation-wide coordinated approach to bring together public, nonprofit and private stakeholders with expertise and interest in financial literacy (OECD, 2021). In these efforts, the Oesterreichische Nationalbank (OeNB) takes a leading role in the respective decision-making bodies, making contributions based on its core competencies, such as monetary policy and price stability, as well as on its expertise in financial literacy research and education. The main goals of the national financial literacy strategy for Austria are preventing overindebtedness especially among the young, promoting long-term planning for sustainable financial well-being as well as improving access to high-quality financial education while constantly considering gender balance, digital transformation and environmental sustainability.

Besides increased efforts to foster financial literacy, special attention is also being given to the evaluation of education programs and their outcomes (OECD, 2022a). Indeed, Austria’s financial literacy strategy is characterized by a strong commitment to evidence-based policymaking, including evaluation efforts both of the overall national strategy and individual financial education measures. However, improving the financial literacy of a population requires, above all, the accurate identification of strengths and weaknesses by precisely and repeatedly measuring current financial literacy levels.

In this context, the International Survey of Adult Financial Literacy (ISAFL) of the Organisation for Economic Co-operation and Development/International Network on Financial Education (OECD/INFE) and the corresponding Austrian Survey of Financial Literacy (ASFL) represent a unique opportunity to gage financial literacy and related concepts on the national and the international level. This report presents the first results of the ASFL conducted in 2023 among a representative sample of Austrian residents and compares them to the available international results of the 2023 ISAFL.

The main findings of this report can be summarized as follows:

• Among the 40 countries participating in the 2023 ISAFL, Austria achieved financial literacy results that were high above the international average in terms of financial knowledge, financial behavior and financial attitudes.

• Compared with 2019, Austria again posted a statistically significant increase in financial knowledge.

• By international comparison, Austria’s resident population exhibited high financial knowledge with regard to basic questions. However, half of the population was found to struggle with understanding compound interest.

• People living in Austria generally appear to be in control of their day-to-day finances. Only little more than half of the population, however, reported setting long-term financial goals. This potential lack of future-orientation is further reflected in financial attitudes, as only about one-half of respondents indicated that long-term plans took priority over short-term gratification.

• High financial literacy is associated with holding a larger number of financial product types. Generally, holding credit or investment products shows a positive correlation with financial literacy. However, for consumer and microfinance loans, the relationship is reversed.

• The financial knowledge score exhibits a gender gap conditional on age, with young women, in particular, obtaining lower scores than young men.

• In digital financial literacy, Austria ranks midfield by international comparison. Interestingly, in Austria, digital financial literacy does not appear to be correlated with the use of sophisticated digital financial services or the overall number of digital financial services used.

• With regard to financial literacy, Austria also ranks high in terms of financial well-being.

• In Austria, age appears to be one of the strongest predictors of financial well-being, with respondents over the age of 74 scoring almost twice as high as respondents under the age of 25.

• Financial well-being exhibits a gender gap, with women indicating lower financial well-being than men.

• Overall, financial literacy is significantly and positively associated with financial well-being.

• While financial knowledge appears to be an important driver of financial well-being for individuals from medium-income households, prudent financial behaviors have a particularly strong effect for people with low incomes.

The remainder of this report is structured as follows: Section 1 provides background information on the ISAFL and ASFL. Sections 2 to 4 are each dedicated to one of the concepts measured by the ASFL/ISAFL in line with the OECD Toolkit, namely financial literacy , digital financial literacy and financial well-being . In each of these sections, we conduct cross-country comparisons as well as detailed analyses of the results specific to Austria. In addition to univariate analyses, we also investigate the relationships between variables of interest across various sociodemographic groups to identify bi- and multivariate associations. Additionally, we include a brief exploration of how a concept is related to important contextual factors besides sociodemographics concerning the personal financial situation, e.g. financial product holding. Finally, we conclude the report by summarizing results and deriving general policy recommendations to foster financial literacy and well-being in Austria. Annex A presents results from additional analyses. The survey questions in English and German can be found in annex B.

1 The OECD/INFE International Survey of Adult Financial Literacy

Given that it is regularly conducted in many countries around the world, the International Survey of Adult Financial Literacy (ISAFL), coordinated by the OECD’s International Network of Financial Education (INFE), is one of the most comprehensive efforts to measure financial literacy that is aimed at informing policymaking. Despite certain limitations, the primary benefit of such standardized financial literacy surveys lies in their capacity to enable both cross-country comparisons and longitudinal assessments (within countries) if the surveys are conducted repeatedly.

The ISAFL has been conducted three times since 2014. In 2023, the ISAFL counted 40 participating countries (including Austria) from Europe, Asia, South America and the Middle East (OECD, 2023). It was conducted in 21 of the 27 EU member states and in 20 of the 38 OECD member states. Notably absent are most of the OECD’s English-speaking countries, namely Australia, Canada, New Zealand, the United Kingdom and the United States. These countries, among others, typically measure financial literacy in national assessments or other international efforts, frequently relying on the concept of financial capability (see, e.g. Financial Consumer Agency of Canada, 2019; Lin et al., 2022; Money Advice Service, 2018) instead of financial literacy, with a varying degree of overlap between the two concepts.

Since its inception, the ISAFL has measured financial literacy as a combination of financial knowledge, financial attitudes and financial behaviors, with a distinct set of questions covering each of these components. While the financial knowledge score indeed relies on a set of knowledge questions with right or wrong answers, the other two scores rely on self-assessment or agreement to statements. These questions have remained largely unchanged since 2014, thus allowing longitudinal comparisons over time. Responding to recent developments in the field, the 2023 ISAFL was the first to also include an independent digital financial literacy score and a financial well-being score (OECD, 2022b, 2023).

The ISAFL joins the ranks of several other efforts to assess financial literacy levels internationally. For example, a recent Eurobarometer survey assessed levels of financial literacy, resilience and inclusion in the 27 EU member states (European Commission, 2023). In 2014, the Standard & Poor’s Ratings Services Global Financial Literacy Survey was conducted in 143 countries as part of the Gallup World Poll Survey (Klapper et al., 2015). While goals and content of these international surveys are similar, they differ from the ISAFL in key aspects concerning the participating countries, the operationalization of financial literacy in specific questions and score calculations, as well as sampling and interview methods. Thus, despite strong similarities on the surface, results of these surveys are not directly comparable.

The Austrian Survey of Financial Literacy (ASFL) is Austria’s contribution to the ISAFL. It is the only international survey of financial literacy that is conducted regularly in Austria. As in the previous two waves ² , the OeNB was responsible for ASFL data collection and analysis also in 2023 and carried out the survey based on the OECD/INFE Toolkit (OECD, 2022b). The ASFL target population are individuals with a private address in Austria, aged 16 or older, irrespective of their citizenship. Data for the ASFL 2023 were collected between August 21, 2023, and December 17, 2023, as part of the OeNB Barometer survey.

To ensure representativity by minimizing different types of bias, elaborate sampling and weighting methods were employed, resulting in population weights that combine design, nonresponse and post-stratification weights. An in-depth view of the data collection process of the ASFL 2023 wave including a detailed description of sampling techniques and weighting methods applied can be found in the methodological notes on the OeNB Barometer (Voith and Zieser, 2024).

Using a mixed-mode approach combining personal and online interviews, the ASFL 2023 yielded 1,414 observations in total, consisting of 987 computer-assisted personal interviews (CAPIs) and 427 computer-assisted web interviews (CAWIs). Exclusively for the purpose of cross-country comparison and in line with the guidelines of the OECD/INFE Toolkit, the target population and, consequently, the sample was restricted to individuals aged between 18 and 79, leading to a reduced sample size of 1,317 observations. Apart from cross-country comparisons, i.e. for all detailed analyses of the Austrian sample, the total sample of 1,414 individuals aged 16 and older was used.

2 Financial literacy

The OECD/INFE defines financial literacy as “a combination of financial awareness, knowledge, skills, attitudes, and behaviours required to make sound financial decisions and ultimately achieve individual financial well-being” (2020c, p. 6). In line with this definition, the OECD/INFE Toolkit (OECD, 2022b) used for the ISAFL distinguishes three components of financial literacy: financial knowledge, financial behavior and financial attitude.

To measure these components, each survey participant was asked several specific questions. Responses were used to calculate scores for each participant, with a higher score indicating a stronger degree of financial knowledge, behaviors or attitudes considered necessary or beneficial for long-term financial well-being. The OECD/INFE Toolkit (OECD, 2022b, p. 39–44) explains in detail how scores for the three components are calculated. The exact set of German-language questions used in the ASFL and the original English questions from the OECD/INFE Toolkit can be found in annex B.

As is typical for international measurement exercises, it is difficult for questions and scores to measure complex constructs validly, reliably and fairly across many countries without compromises. It is thus important to point to the potential drawbacks of the measurement approach used in the ISAFL/ASFL to make explicit how conceptual and operational choices affect eventual outcome and to avoid a misinterpretation of results.

First, the questionnaire tests the components of financial literacy only on a basic level, neither requiring expert knowledge nor special skills. This means that a high financial literacy score indicates a basic understanding of fundamental financial concepts as well as the application of financially prudent everyday behaviors as opposed to exceptional abilities. In the financial knowledge score, in particular, this is also reflected in severe ceiling effects, with a large proportion of people living in Austria reaching the maximum of seven points. This may affect the sensitivity of the instrument in detecting differences among population groups. In future ISAFL/ASFL waves, more advanced questions might thus be useful to further discern financial literacy levels.

Second, financial behavior and attitude scores rely entirely on self-reporting. There is thus no external verification of whether respondents actually apply behaviors or have attitudes as indicated. This might be problematic especially as being financially prudent may be considered socially desirable, which may bias reports of such behaviors (for discussions on the social desirability bias, see e.g. Krumpal, 2013; Tourangeau and Yan, 2007). Moreover, financial literacy itself may influence the accuracy of reports on one’s own financial situation (see Madeira and Margaretic, 2022). Responses may also be biased systematically across borders or between cultural or socioeconomic groups (see Lacko et al., 2022; Teh et al., 2023).

Third, it is unclear how the three financial literacy components are intended to interact with each other to constitute financial literacy. In contemporary studies on financial well-being, financial knowledge and financial attitudes are regarded as determinants of financial behaviors (see e.g. ANZ, 2021; Hwang and Park, 2023). In the ISAFL, however, the three components can be regarded as (arbitrarily) weighted formative indicators of the latent construct of financial literacy, where each component focuses on different types of individual characteristics. However, components also appear to capture different content dimensions. For example, the knowledge component appears to focus more strongly on concepts related to investment decisions, whereas the behavior component appears to focus on day-to-day money management.

While we do not conduct in-depth analyses of relations between the three components, we indeed find modest correlations only between financial behavior and financial knowledge ( r = 0.20) as well as between financial attitude and financial behavior ( r = 0.22) but not between financial attitude and financial knowledge ( r = 0.06). We thus report detailed results on all three components as well as on potential differential relationships with financial well-being. For a detailed analysis of the relationships between the financial literacy components of knowledge, attitudes and behavior based on Austrian data from the 2014 ASFL wave, see Fessler et al. (2020).

2.1 Cross-country comparison of financial literacy results

In this subsection, we use the financial literacy scores for comparisons across countries that participated in the 2023 ISAFL. The OECD/INFE already performed the same analysis in their official report of the 2023 ISAFL (OECD, 2023). Since the Austrian data could not be submitted to the OECD/INFE early enough, they are not included in the report. We therefore add the Austrian data to the existing cross-country comparisons as reported by the OECD to expand the number of countries and benchmark the Austrian results. For the sake of legibility, we rank countries from the highest to the lowest score for the respective financial literacy indicator. However, although the OECD/INFE Toolkit ensures a certain uniformity in the approach to measuring and data collection, there are substantial differences concerning the sampling period, sampling design, survey mode and other methodological aspects such as weighting that affect the presented values. ⁵ As the population intended for international comparisons consists of individuals aged 18 to 79, the ASFL sample has been reduced accordingly.

Chart 1 shows the average overall financial literacy score consisting of the three component scores for financial knowledge, financial behavior and financial attitude. With an average financial literacy score of 72 out of 100, Austria ranks very high among the 40 participating countries. Only Germany, with an average score of 76, exhibits higher financial literacy levels. Also reaching above 70% of the maximum average score, Thailand, Hong Kong (China) and Ireland are among the top nations as regards financial literacy. Within the EU, there is considerable heterogeneity regarding financial literacy scores: While the populations of most other EU member states also tend to perform well or at least around the OECD average, Lithuania, Cyprus, Romania and Italy lag behind with scores between 53 and 56.

Considering the components of financial literacy individually, chart 2 compares financial knowledge across countries, showing the proportion of respondents who answered at least five out of seven financial knowledge question correctly. Overall, we find that countries displaying a high average financial literacy score also have a higher proportion of adults who reach what the OECD/INFE defines as the “minimum target score” for financial knowledge. Therefore, Hong Kong (China), Germany and Austria again are at the top of the field. Still, there are some countries that rank high on the financial literacy score but rank comparatively low in terms of financial knowledge and vice versa, showing a certain disconnect between financial knowledge and the other components. Notably, Hungary and Cyprus, despite a low average financial literacy score, have a comparably high share of people with at least basic financial knowledge.

In a similar way, chart 3 examines financial behavior, where the “minimum target score” is defined as reporting six out of nine financially prudent behaviors that make up the financial behavior score. Again, we find countries that displayed high financial literacy scores leading in this statistic, again with some discrepancy between the rankings, i.e. populations with comparably high financial knowledge do not necessarily apply financially literate behaviors to the same extent. With two out of three persons reporting at least six behaviors, such as saving, budgeting or shopping around, Austria ranks considerably above average.

2.2 Financial literacy results in detail

We now turn to the results of the ASFL 2023 and examine financial literacy in Austria in more detail. Since the ASFL was conducted for the third time in 2023 and its measurement approach has remained sufficiently consistent ⁶ , we can make longitudinal comparisons of financial literacy scores and their items to learn how financial literacy levels in Austria developed over the last decade. However, this comparison should be treated with caution as some changes in data collection and weighting were made between the 2023 ASFL wave and previous waves, which is likely to lead to systematic deviations. ⁷

Chart 4 presents the average financial literacy score for Austrian residents aged 16 and older, showing each component for the years 2014, 2019 and 2023. It is evident that financial literacy scores in Austria were at a consistently high level over these years, ranging from 67 in 2015 and 2019 to 72 in 2023. For the current wave, we can observe a statistically significant increase in financial literacy compared with 2019, which can largely be attributed to respondents’ better performance in financial knowledge. ⁸ Starting with a value of 4.8 in 2014, the average financial knowledge score for Austria increased to 5.3 in 2019 and reached 5.8 in 2023. The remaining two components, financial behavior and attitude, remained rather stable over the years and show no statistically significant variation once controlled for survey mode and sample composition.

The changes in the distribution of financial knowledge scores between the ASFL 2014, the ASFL 2019 and the ASFL 2023 are depicted in chart 5. Less than 20% of respondents were able to reach the maximum financial knowledge score in 2014, almost 30% did so in 2019, however, and over 40% in 2023. Conversely, the proportion of respondents scoring less than five points, which the OECD/INFE defines as the minimum target, shrank from one-third in 2014 to one-quarter in 2019 and then again to one-sixth in 2023. Additional regression analyses presented in chart A2 in annex A reveal that respondents scored significantly better for all financial knowledge questions than in 2019. The difference becomes even more pronounced when controlling for survey mode and sociodemographic characteristics, which is mainly due to CAPI respondents obtaining higher scores than their CAWI counterparts. Therefore, it is highly unlikely that the observed improvement is due to sample composition or mode effects.

The further improvement in financial knowledge among Austrian residents may be attributed to several factors beyond the scope of the survey. Two explanations already discussed by Fessler, Jelovsek and Silgoner (2020) come to mind. First, financial knowledge may have improved due to an increasing salience of economic topics in the news media, exemplified lately by coverage on the euro area inflation rate. Such widespread coverage may have facilitated informal learning about the core characteristics of inflation and may have increased interest in economic and financial topics among the population.

Second, the intensification of policymaking efforts and the proliferation of financial education initiatives in Austria over the last four years might begin to show first effects. The national financial literacy strategy for Austria was implemented in 2021 as a nation-wide coordinated approach to fostering financial literacy. Currently, it comprises about 140 individual measures, more than 30 of which are provided by the OeNB. Taken together, these measures reach tens of thousands of people each year through workshops and e-learning modules. Apart from the fact that it is generally difficult to reliably attribute causal effects in natural settings, the ASLF 2023 itself cannot provide any empirical evidence for either of the above explanations.

Examining how respondents performed in individual knowledge questions that make up the financial knowledge score ⁹ , we find that in 2023 about 95% of people living in Austria are able to answer questions about the definition of inflation and the relationship between risk and return. Around 90% of respondents know the meaning of interest on a loan and the time value of money. More than 80% were able to conduct a simple interest calculation by computing the total value derived from both the principal and the interest rate over a specified period. The two most difficult financial knowledge items, risk diversification and compound interest calculation, were answered correctly by 74% and 52% of respondents, respectively. Interestingly, these two questions may be regarded as knowledge fundamentals for long-term wealth accumulation through investing.

The financial behavior score subsumes different actions or behaviors considered financially savvy. Chart 7 displays, for each of the nine specific behaviors, the proportion of adults who reported such behavior and, therefore, received a point. Generally, most respondents appear in control of their finances and able to meet financial obligations. Indeed, nine in ten people living in Austria reported that they had not borrowed money to make ends meet within the last 12 months, while about the same number also reported that they paid their bills on time. Moreover, 86% of respondents indicated that they had saved money in the past 12 months. As the corresponding survey question does not distinguish between different modes of saving or saving amounts, it may cover a wide range of saving amounts and methods, ranging from piggy banks to crypto assets.

Most respondents also seem to monitor their finances, with 85% agreeing with the statement “I keep a close watch on my personal financial affairs.” However, only part of this general awareness appears to translate into concrete action, as only 64% of survey participants reported at least two concrete behaviors demonstrating that they actively kept track of their money. 73% of Austrian residents surveyed indicated that before buying something they carefully considered if they could afford it (“Makes considered purchases”). The relevance of these questions, however, may depend on the necessity to monitor one’s finances conditional on disposable income or savings.

Although the setting of long-term financial goals can be considered the basis for both daily behaviors as well as saving and investment strategies, only about half of respondents indicated doing so. In conjunction with high rates of saving, little knowledge on risk diversification and compound interest, limited future-orientation in the attitudes score (see below) and low rates of owning investment products (see section 2.4), this result may indicate a certain reluctance of the Austrian population to engage in more complex financial matters in a future-oriented way.

In addition, chart 7 deceptively suggests that respondents rarely obtain in-depth information before purchasing financial products, as comparing products across providers and seeking prior advice from independent or nonindependent sources are by far the least reported financial behaviors. However, the low scores with respect to these three items can be explained by the fact that the respective questions applied only to those who had bought financial products in the past two years. Consequently, all other respondents had no opportunity to score points here. ¹⁰ In fact, of those respondents who had bought new financial products in the past two years, a great majority reported that they had sought prior advice or shopped around.

Generally, the financial literacy score and its components have some limitations that should be kept in mind when interpreting the results. Clearly, the distinction between a mere attitude and an actual behavior is not always apparent, especially when relying entirely on self-reporting socially desirable behaviors. The discrepancy between the proportion of people “closely watching personal financial affairs” and that of people “keeping track of money in the short term” may exemplify this ambiguity. Moreover, rather than being indicative of financially savvy behaviors, some items might strongly be influenced by one’s income and asset situation. For example, people with high financial resources might be less reliant on rigorous budgeting in their everyday life and have no need to borrow money in case of an expenditure shock.

Chart 8 presents the results for the two items used to evaluate the financial attitudes of respondents. As disagreement with the listed statements translates into higher scores, chart 8 also gives the shares of respondents with financially beneficial attitudes. In total, 58% appear to have cultivated a certain mindset of preparedness by not just living for today but also thinking about tomorrow, while 44% report a preference of delaying short-term gratification in favor of long-term financial security. Although a large majority of respondents indicated that they actively saved, not all of them appear to do so with a future-oriented attitude or concrete plans.

2.3 Comparison across sociodemographic groups

Comparing financial literacy scores across different sociodemographic characteristics is essential for understanding the nuances and disparities in financial knowledge, behaviors and attitudes across different population segments. Notably, such a comparison may prove valuable for policymakers and financial educators to gain insights into which groups of the population may benefit most from targeted financial education campaigns or interventions. However, low financial literacy among certain demographic groups may not only be regarded as a mandate for stepping up financial education efforts but also hint at systemic barriers and societal challenges that prevent individuals from acquiring or benefiting from certain forms of knowledge or behavior.

Table 1 breaks down the average financial literacy scores by age, gender, education, household income, occupation, family and household status, and municipality. ¹¹ The relation of financial literacy and age resembles an inverted L shape, with people in the midst of their professional lives tending to perform best. With a total score of 64.8, the youngest age group shows by far the lowest financial literacy score. Based on the literature, we are confident to largely attribute this gap to an age effect and not a cohort effect: Most likely, young people have not yet acquired sufficient experience in personal finance by buying financial products, pursuing a professional career or managing a household on their own (see e.g. Frijns et al., 2014).

Examining the difference in financial knowledge between male and female respondents, we find the well-documented gender gap. ¹² On average men score 0.6 points higher in financial knowledge than women, an absolute difference similar to the one found in the 2019 ASFL wave (Fessler et al., 2020). Thus, despite an overall increase in financial knowledge since 2019, the financial literacy gender gap proves to be persistent.

Chart 9 shows the relation between age and financial knowledge by gender in form of a binned scatterplot, with each point representing the mean of 5% of the respective subsample. For women, we also find the inverted U shape that has been well documented in the literature (e.g., Klapper and Lusardi, 2020). For men, however, there appears to be no systematic variation in financial knowledge over age. This implies that the size of the gender gap changes with age. Young women, in particular, score significantly lower than young men, while around the age of 55, scores are comparatively equal for both groups. The gender gap then tends to widen again among the elderly, which may partly be explained by the higher life expectancy of women as well as a cohort effect, given that personal finances were long considered men’s affair.

We find that people with higher levels of formal education on average also achieve higher financial literacy scores. The gap in financial literacy levels is largest between respondents without any secondary education and those who have completed education beyond the compulsory level. Tertiary education (university or technical college), however, appears to improve financial literacy levels only slightly.

There is also a strong positive correlation between income and overall financial literacy. Importantly, this cannot serve as evidence for a causal effect of financial literacy on income or vice versa, given many possible confounders and the theoretically unclear direction or reciprocity of a potential direct relationship. On the one hand, high financial literacy levels may enable individuals to make better life decisions from a financial perspective, including e.g. education or job choices. On the other hand, those with higher incomes may have more incentives and occasions to improve their financial literacy, particularly with regard to investment-related knowledge.

In contrast to the previous ASFL waves, we do not find the self-employed to score highest on any of the financial literacy components but rather public servants and white-collar workers. This may, in part, be explained by the operationalization of financial literacy itself, as most questions appear to focus on the consumer side of finances and less on proper accounting and financial management in a business setting. Nevertheless, while these differences are not overly large and are based on a comparatively small subsample, they do show a reversed trend compared with previous ASFL waves (see Fessler et al., 2020; Silgoner et al., 2015).

Lastly, we find slight differences between household types, where respondents living in a household with a partner show higher financial literacy scores overall. Moreover, we find that respondents living with children generally exhibit a slightly higher future-orientation in their attitudes, possibly reflecting the wish to provide for a financially safe future of their children. Single households with children, however, show the lowest financial knowledge score of the family and household status categories which possibly points to a need of targeted education policies to support this particular group. Differences due to municipality size are not pronounced. However, there appears the distinct trend that respondents living in smaller municipalities are more future-oriented in their attitudes than those living in larger ones. As with all (sociodemographic) variables, specific group differences should not be interpreted independently of other potentially relevant variables, and causal interpretations should only be approached with considerable caution.

2.4 Holding of financial products

Financial literacy may prove particularly relevant when it comes to using financial products. Only a financially literate person can form a reasonable judgment on whether, when and how to use certain financial products to foster their long-term financial well-being. Conversely, someone without sufficient knowledge or the wrong attitude or expectations is at risk to substantially worsen their financial situation. Not knowing about the advantages of risk diversification, for example, is likely to lead to suboptimal investment behavior. Taking out certain types of loans may negatively affect well-being (see e.g. Bialowolski and Weziak-Bialowolska, 2021). Moreover, the use of financial products, in particular loans, by a considerable share of persons may also affect financial stability (Guttmann and Plihon, 2010). Therefore, the relationship between financial product holding and financial literacy can be considered important evidence of whether people are capable of using financial products responsibly and to their own benefit.

Table 2 shows the means of financial literacy scores conditional on holding a certain type of financial product. Overall, the holding of almost all financial products, including mortgages or secured loans, is associated with an above-average financial literacy score. Only for holders of microfinance and consumer loans, the average financial literacy score is significantly below the overall mean. Consumer loans may allow people to purchase goods or services they could not afford otherwise. This renders these loans particularly tempting to people who are less forward looking in their financial attitude and less mindful in their financial behavior. Concerning the component scores for holders of a consumer loan, we mainly find below-average financial behavior and financial attitude to be responsible for an overall lower score of financial literacy.

Regarding asset categories, comparing the conditional means of those holding traditional low-risk savings products, such as savings accounts and building savings contracts, with the means of those holding investment products, such investment accounts, stocks or bonds, we find substantially higher levels of financial literacy among the latter group. Especially those using more sophisticated financial products tend to have higher knowledge and report more financially savvy behaviors, possibly because such knowledge and behaviors are needed to handle these products responsibly. Albeit with only a small number of observations in our sample, holders of crypto assets also tend to display above-average financial literacy. Finally, investors in sustainable financial products concerning environmental, social and corporate governance (ESG) issues represent the most financially literate subgroup among product holders.

Another perspective arises when we look at the relation between the number of financial product types a person holds and the person’s financial literacy. Chart 10 shows a scatterplot of the two variables, including a linear regression line. Clearly, the relation is positive, indicating that holding a high number of different financial products is associated with high financial literacy scores. For this relationship, both causal directions can be explained intuitively. On the one hand, people with high financial literacy will make use of a greater variety of financial products to optimize their financial situation. This explanation is in line with banks’ and insurers’ frequent commitment to financial education, as financially literate persons tend to buy more financial products and, therefore, make good customers. On the other hand, this relationship may point to a “learning-by-doing” effect: Holding more financial products necessitates engaging more with financial matters, which may in turn improve financial knowledge and raise awareness on financial behaviors and attitudes. Naturally, the relationship is likely to be affected by several confounding variables. Again, income and the overall amount of assets are likely to play a major role in this regard, as many financial products require a certain income or amount of assets to be used effectively, e.g. investment products, or to be used at all, e.g. mortgages.

3 Digital financial literacy

In today’s increasingly digitalized world, more and more financial services are conducted online and rely on digital technology. To address the new opportunities and risks these recent developments in the financial sector present to consumers, the concept of digital financial literacy has been introduced. Its main purpose lies in bridging the gap between traditional financial literacy and navigating the contemporary digital financial landscape, which requires an additional set of competencies.

Typically, digital financial literacy encompasses the ability to properly and effectively use financial technology services, such as online banking platforms, mobile payment applications, trading apps or budgeting software. Many definitions also include fraud prevention and the protection of personal financial information on the internet (see Koskelainen et al., 2023; Lyons and Kass-Hanna, 2021; Morgan et al., 2019). In view of the increase in digital crimes and comparatively low detection rates, the ability to recognize scams and to remain vigilant when handling financial matters can be regarded as particularly important in avoiding significant financial harm.

Importantly, the interpretation of the results is contingent upon whether respondents have access to or actively use the internet. On the one hand, internet access or use can be regarded as a prerequisite for the meaningful interpretation of digital financial literacy. However, results from individuals who currently do not have access to or use the internet may also be relevant, as their situation could change at any point in the future. ¹³ Thus, for countries where the distinction is available, we follow the OECD/INFE and report scores for the overall sample as well as the subsample of people with internet access in the cross-country comparison. The ASFL 2023, however, did not include a question on internet access, asking respondents instead how often they had used the internet in the past three months. This means that for the cross-country comparison, the Austrian results for people having internet access were not available. For the in-depth analysis of the Austrian results, we report separate means and proportions for the subsample of internet users.

One major point of criticism may be the restricted thematic scope of the OECD/INFE digital financial literacy items. With their almost exclusive focus on risks and self-protection, the questions do not yet reflect current concepts of digital financial literacy (e.g. Lyons and Kass-Hanna, 2021) and do not evaluate whether respondents are capable of seizing opportunities provided by digital financial services and using financial technology to their own benefit. Indeed, while digital financial literacy does not appear to be associated with the use of digital financial services (see section 3.4), it is associated with a significantly lower rate of falling victim to phishing attacks or of carelessly providing personal information, but only marginally more so than financial literacy (see table A1 in annex A).

Finally, several questions, especially those reflecting attitudes, are phrased in a way that is likely to provoke socially desirable responses, which might eventually bias the results and prevent interpretable results on the absolute level. Indirect or more nuanced questions may be a potential remedy. Moreover, the distinction between attitudes and self-reported behaviors remains somewhat ambiguous in the current version of the survey. A future version may thus benefit from using items on general attitudes rather than items on attitudes toward certain behaviors.

3.1 Cross-country comparison of digital financial literacy results

Chart 11 shows that with regard to digital financial literacy, Austria ranks slightly above average among the 30 participating nations ¹⁴ , posting an average score of 58.8 (total sample) out of 100 possible points. The top three leading nations in this field include Hong Kong (China), Ireland and Germany. The EU member states with the lowest digital financial literacy scores are Lithuania, Italy, Cyprus and Romania. While Austria was among the top performers in financial literacy, it only ranks in the upper midrange in terms of digital financial literacy, which suggests significant room for improvement in this area.

3.2 Digital financial literacy results in detail

Chart 12 shows the results of the individual questions that make up the digital financial literacy score for Austria. With regard to protecting their confidential or personal data offline and online, Austrian residents appear to be rather cautious and informed. As to data protection, about 90% do not share information about their finances publicly online and over 80% of internet users know that personal data they share online can be used for personalized commercial or financial offers.

The results regarding the survey questions on regulation and legal issues are mixed. Only about one-third of respondents indicated that they checked whether a financial product was regulated in their country before buying it. Moreover, about two-thirds of Austria residents know that crypto assets do not have the same legal tender as banknotes and coins issued by central banks. These results, however, may not be problematic as only a comparatively small number of people in Austria tend to buy financial products online or own crypto assets. Only one-half of Austrian online users find reading terms and conditions important, which may not necessarily reflect negligence but rather high trust in the applicable consumer protection regime. What gives cause for concern, however, is that only half of internet users in Austria appear to be aware of the fact that digital financial contracts do not require the additional signing of a paper contract.

Most respondents consider password and digital security important when dealing with financial transactions. Interestingly, results for the two items on password behavior are found on the opposite ends of the spectrum: While over 90% of respondents would not share passwords and PINs of their bank account with close friends, only one-fifth regularly change the passwords they use for handling their financial affairs. Finally, about half of Austrian internet users report being skeptic toward using public Wi-Fi networks for online shopping.

3.3 Comparison across sociodemographic groups

Examining table 3, we find an inverted U-shape relationship between age and digital financial literacy. Notably, at 39.6 out of 100, people above the age of 74 have a digital financial literacy score that is far below the overall average. As the elderly population generally uses a smaller number of digital financial services, their low level of digital financial literacy may not necessarily put them at greater risk of online fraud. Still, as basic financial affairs are increasingly managed online, eventually the elderly may become more vulnerable to online fraud as well.

Again, as with the findings on financial literacy, the average digital financial literacy scores reveal a statistically significant gender gap. In general, digital financial literacy increases with educational attainment up to the successful completion of secondary school. A tertiary degree does not appear to further improve digital financial literacy. There is a clear positive correlation between household income and the digital financial literacy score. This might indicate that those who can least afford to do so tend to display more risky and less informed online behaviors. Differences in digital financial literacy by job status also reflect the previous insights. Lastly, we find that single households have lower digital financial literacy scores than other household types, while the urban population shows the highest digital financial literacy scores compared to residents of smaller municipalities.

3.4 Use of digital financial services

Digital financial literacy is particularly relevant for those actively engaging with digital financial services. As a result, the OECD/INFE Toolkit includes various questions on the extent to which individuals perform financial tasks online, ranging from basic activities like checking balances or online shopping to more advanced ones such as online trading or crowdfunding. To contextualize the findings on digital financial literacy, two main questions appear useful: How many people use different types of digital financial services? And do users of these services demonstrate higher levels of digital financial literacy compared to nonusers? By providing weighted proportions of individuals who have conducted specific financial tasks, along with conditional means of the digital financial literacy score for the respective subsample, table 4 offers insights that help address these questions.

As table 4 shows, we find three digital financial services that are used by around three-quarters of Austrian residents, namely when checking bank account balances, paying bills and buying goods and services online. Additionally, transferring money and managing financial products online can also be considered widespread, as slightly more than half of the respondents stated that they made use of these options. However, everyday online banking usage does not seem to predict substantially higher levels of digital financial literacy, as the influence of engaging in the corresponding activities is only slightly greater than that of general internet use.

Only a small proportion of respondents said they had concluded contracts for financial products or services fully online. Overall, the costlier or riskier the activity, e.g. opening a bank account versus taking out a loan, the smaller the share of respondents who said they had done so. About one-third of Austrian residents have already conducted payments with their smartphones. Still, they only reach average digital financial literacy scores. Considering that mobile payments are vulnerable to a number of cybersecurity threats, e.g. malware, phishing or unauthorized access, this finding may give cause for concern.

Interestingly, making use of more sophisticated digital financial services and tools, such as online trading platforms, multi-banking apps or robot-advisors for financial planning, tends to be negatively correlated with the digital financial literacy score. This may suggest that those using advanced digital financial services might exhibit less of the knowledge, behaviors and attitudes necessary to effectively protect themselves against the risks of these services. Note that these results may also reflect the influence of risk seeking or familiarity with digital environments, which could be expressed both in terms of less cautious online behavior and the use of unconventional or risky financial products.

In addition, there appears to be no appreciable association between the digital financial literacy score and the overall number of digital financial services used, as visualized by the scatterplot and regression line in chart 13. Unlike for financial literacy, where holding more (and more sophisticated) financial products is also associated with higher financial literacy scores, using digital financial services shows no correlation with digital financial literacy. The lack of association may be explained by a low construct validity of the digital financial literacy score, which may not (exclusively) measure digital financial literacy. Moreover, the fact that the correlation between financial literacy and digital financial literacy is rather weak ( r = 0.28) might be another indication that the measure put forward by the OECD/INFE might focus too narrowly on fraud and risk prevention and put too little emphasis on attaining financial goals through digital means.

4 Financial well-being

Financial well-being is commonly considered the ultimate goal of financial literacy, e.g. according to the OECD’s definition of financial literacy, and is thus also the goal of financial education. Indeed, financial well-being has received increased attention from policymaking bodies, academia and private stakeholders (e.g. ANZ, 2021; OECD, 2020b, 2022a; Warmath, 2022). Although there is no universally accepted definition of financial well-being, most definitions share the notion that financial well-being essentially represents being able to meet one’s current and future financial needs, sometimes including concepts such as financial security, financial freedom or enjoyment of life (see e.g. Brüggen et al., 2017; CFPB, 2015). However, there is some ambiguity in the literature on whether financial well-being should be defined as a purely subjective concept (as in e.g. Riitsalu and Van Raaij, 2022), reflecting only individuals’ perceptions, or whether it also includes objective factors such as income (as in e.g. Sorgente and Lanz, 2019).

Although a link between financial literacy and financial well-being is documented in the literature, potential reasons for (a lack of) financial well-being go far beyond financial literacy and include economic factors such as people’s income or asset situation, contextual factors such as family status, living conditions, environmental factors such as social norms or national policies, and personality traits. While these factors may interact with financial literacy, they have been found to have substantial explanatory power independently of financial literacy (see ANZ, 2021; Hwang and Park, 2023).

For each answer pointing toward high financial well-being, respondents are awarded a point on the financial well-being score. Although there are twice as many questions on subjective financial well-being as on financial resilience, in the final score, both dimensions are given equal weight. This is achieved by rescaling each component to range from 0 to 50 and then adding them up to arrive at the final score, allowing a maximum score of 100 points.

Using an index composed of several items to measure financial well-being has the advantage of capturing more nuances of potentially complex financial situations. A potential blind spot of the score is the role of different social security systems that influence the relative importance of savings in case of certain financial shocks. Especially for the question on coping with an income shock, there remains considerable ambiguity on whether respondents should consider unemployment benefits, which differ in height from country to country and may considerably affect financial vulnerability (see Rapp and Humer, 2023). Moreover, the item asking about agreement with the statement “I have too much debt right now” is intended to measure subjective financial well-being but is strongly influenced by the objective fact of having debt at all. Furthermore, for people whose income surpasses their necessary expenses, the question evaluating whether a person has “money left over at the end of the month” might be more closely linked to prudent financial behavior instead of financial well-being. Moreover, the same item is ambiguous, as “money left over” could refer to both excess income that can be saved or a net positive balance, i.e. savings or financial assets.

4.1 Cross-country comparison of financial well-being results

Combining the results presented in the OECD/INFE report with the data for Austria, chart 14 shows the average financial well-being score for each of the 38 countries that collected the required data. Scoring 63 out of 100 points, Austria ranks among the top countries in terms of financial well-being. Far ahead of the rest of the field, Germany ranks first with a financial well-being score of 73. Other countries with top scores include Hong Kong (China), Ireland, Sweden and the Netherlands. Croatia, Romania and Greece display the lowest financial well-being scores in the EU. A comparison of the scores for financial well-being with those for financial literacy already hints at a correlation between the two, i.e. countries with high (low) scores in financial literacy also tend to have high (low) scores in financial well-being. As mentioned in section 2.1, it cannot be ruled out that sampling, method or weighting effects influence the results of country comparisons to a certain degree.

4.2 Financial well-being results in detail

Chart 15 examines in further detail how respondents in Austria answered the questions feeding into the financial well-being score. Turning first to the objective aspects of financial well-being, we find that about 80% of Austrian residents are able to cover their living expenses with their income on a regular basis, while three out of four also have a financial buffer of at least one month’s income. For the other two perhaps more demanding items, the shares of people scoring a point are significantly lower. Due to the abovementioned ambiguities of these items, it is difficult to interpret these findings accurately. It thus remains unclear whether roughly 60% of Austrian respondents are able to cover their living expenses for at least three months without their main source of income either with or without relying on social security benefits. This is because it is unclear whether the available social security benefits, which are considerable in Austria, were considered in the response to this question or not.

With regard to subjective financial well-being, the related items generally display lower proportions than those measuring the objective dimension, with the exception of the question related to people’s perceived debt burden, which is quasi-conditional on having debt at all. The subjective dimension encompasses not only the ability to make ends meet and cope with financial shocks but also the ability to fulfill their wishes and lifestyle expectations. Most items relating to the subjective dimension relatively evenly divide the sample into two halves. While these absolute ratios may not be suitable for direct interpretation, they may point to a distribution of subjective well-being where half of Austrian residents perceive a certain financial freedom to enjoy life while the other half does not feel that their lifestyle expectations are met.

4.3 Comparison across sociodemographic groups

Table 5 shows the means of financial well-being across sociodemographic characteristics. Most notably, financial well-being is found to have a strong positive relationship with age. Comparing the youngest (16 to 24 years) and the oldest age group (75+ years), we find a 38 point difference in means in favor of the elderly. Both cohort and age effects may explain this relationship (see Ihle and Siebert-Meyerhoff, 2017). Age effects are likely to play a prominent role, however. First, a considerable share of persons tend to earn more money as their professional careers progress and to have the opportunity to accumulate a certain amount of wealth through saving. Second, the likelihood of receiving an inheritance increases with age. Third, once people reach retirement age, they are usually entitled to regular pension payments in Austria, which may provide sufficient financial security in many cases. Fourth, lifestyle aspirations and expenses may generally decline with age, as do concerns about the long-term future.

As with the previous scores, we also observe a significant gender gap in financial well-being. Several potential mediators might explain this relationship. Above all, men in Austria earn higher incomes, on average, and are more often employed full time than women (Statistics Austria, 2023). Another possible explanation is that the gender gap observed in financial literacy partly translates into the gender gap in financial well-being, as financial literacy scores are indeed associated with financial well-being, as detailed in the following section. More rigorous analyses of the gender gap in financial well-being and financial literacy exceed the scope of this report.

Educational attainment is positively associated with financial well-being. However, financial well-being results only differ substantially between those who have only completed compulsory education and those who have completed some form of more advanced education. The fact that these differences are not more pronounced may be related to financial well-being acting as a relative indicator that may be strongly affected by lifestyle expectations and social comparison within peer groups, both of which may differ depending on educational attainment. Nevertheless, a high household income above EUR 3,000 reliably predicts above-average financial well-being scores. Regarding job status, public servants display the highest financial well-being with a mean score about seven points higher than that for the self-employed, about eight points higher than that for white-collar workers and about 13 points higher than that for blue-collar workers. As expected, financial well-being is lowest for single households with children, possibly because these households face a higher burden of financial obligations. The subgroup of people living in a city with more than one million inhabitants, in this case Vienna, shows the lowest levels of financial well-being, possibly because of different demographics and the higher costs of living in Austria’s capital city.

4.4 Correlations between financial well-being and financial literacy

Since financial literacy is frequently defined as a predictor of financial well-being, we expect the two respective scores to correlate significantly and substantively. Chart 16 shows scatterplots and regression lines (dashed lines) between financial well-being and financial literacy scores as well as between financial well-being and the component scores for financial knowledge and financial behavior. In all cases, there is a statistically significant positive correlation between the two variables. As indicated by the dashed lines in chart 16, financial literacy ( r = 0.40, panel A), financial knowledge ( r = 0.26, panel B) and financial behavior ( r = 0.30, panel C) appear to reliably predict financial well-being for the total sample. Examining the scatterplot between financial literacy and financial well-being (panel A) more closely, we find that the top left-hand quadrant, which indicates high financial well-being, but low financial knowledge, contains hardly any observations. This means there are remarkably few individuals with high financial well-being who show low financial literacy, while respondents with low financial well-being are more equally distributed along the range of financial literacy scores. This, in conclusion, may serve as evidence that financial literacy is a necessary but not a sufficient condition for financial well-being.

Given that our analysis relies on cross-sectional data, it is important to note that we cannot infer causality or determine the direction of possible causal effects. On the one hand, financial literacy may increase financial well-being through improving financial behavior and decision-making. On the other, financial literacy and financial well-being are likely to be heavily influenced by people’s income or asset situation. Indeed, financial means may provide the main incentive to improve one’s financial knowledge to effectively maximize returns through more sophisticated financial products. In contrast, people with low income and without any substantial assets might be “rationally ignorant” toward certain types of financial knowledge and behavior from which they cannot benefit anyway (Lusardi et al., 2017; Son and Park, 2019).

While we acknowledge these limitations, we still examine income as a potential moderator of the association between financial literacy and financial well-being. Chart 16 (solid lines) shows the relationship of financial literacy, financial knowledge and financial behavior with financial well-being for different household income groups, respectively. We find that the relationship between financial literacy and financial well-being (panel A) is of similar strength for low and middle income groups, while it tends to be weaker for the highest income group. ¹⁵ This might suggest that for individuals with very high incomes, financial literacy is a less critical factor for financial well-being in the sense that the positive effect of high income might superimpose the positive effect of financial literacy. Alternatively, the weak relationship between financial literacy and financial well-being observed in the highest income group could be attributable to the only basic financial literacy level measured in the survey. As it is, too many respondents in the highest income group achieved high financial literacy scores, which resulted in insufficient variation. In addition, such a ceiling effect might also play a role, in a similar way, with respect to financial well-being, for which high scores do not require particularly high levels of wealth.

As is evident, the overall variance of the financial knowledge score may be considered mainly indicative of differences in the financial knowledge that is necessary for investment decisions, namely knowledge on compound interest and on risk diversification. The financial behavior score, on the other hand, may be interpreted predominantly as prudent day-to-day money management. The corresponding linear regression lines in chart 16 illustrate the relationship of these two components of financial literacy with financial well-being conditional on household income.

Chart 16 (panel B) shows a positive correlation between financial knowledge and financial well-being. However, this correlation is very weak and, in fact, statistically insignificant for households with a monthly household income below EUR 1,800 and for those with a household income above EUR 4,500. ¹⁶ For the latter group, the explanations mentioned above are likely to apply as well. For low-income households, in contrast, this finding might indicate an inability to translate financial knowledge into financial well-being to the same extent as middle income households, perhaps because the financial resources available are insufficient to be effectively used for investing. This finding is also in line with the observation that people with low incomes and few assets mostly do not hold stocks, bonds or funds (Fessler et al., 2023).

Conversely, a different trend emerges concerning the relationship between financial behavior and financial well-being. As chart 16 (panel C) shows, financial behavior has a significantly greater predictive power for individuals living in low-income households than for those in high-income households. ¹⁷ This result may highlight the potential importance of prudent everyday financial behavior for the financial well-being of individuals with low to middle incomes, especially when contrasted with abstract financial knowledge.

5 Summary and recommendations

In this report, we present the results of the 2023 Austrian Survey of Financial Literacy (ASFL), the Austrian contribution to the 2023 International Survey of Adult Financial Literacy (ISAFL) conducted by the OECD/INFE. Overall, we find encouraging results based on a representative sample of 1,414 respondents residing in Austria. On average, Austrians score high in financial literacy. Of the 40 countries participating in the ISAFL, Austria ranks among the top performers on the overall financial literacy score (composed of scores for financial knowledge, behavior and attitudes) and in terms of financial well-being.

Ranking among the top countries in the international comparison concerning financial knowledge, Austria also showed improvements in financial knowledge compared with the ASFL waves of 2015 and 2019. Respondents had difficulties mainly with understanding compound interest and, to a lesser degree, with the concept of risk diversification. Concerning financial behavior, Austria ranks considerably above average, with most respondents exhibiting high control of their day-to-day finances, but only about half of them setting themselves long-term financial goals. A certain lack of future-orientation is also reflected in financial attitudes.

In Austria, the compound score of financial literacy shows a positive association with the number of financial products used. Utilization of all product categories correlates positively with financial literacy, with the notable exceptions of microfinance and consumer loans. This finding supports the assumption that financial literacy as operationalized in the ISAFL and ASFL is a relevant metric for financial sophistication.

Financial literacy scores in Austria are also associated with socioeconomic characteristics. Education up to the level of completed secondary education appears to have primary influence. Notably, we also find a significant gender gap conditional on age. Younger women, in particular, score lower in financial knowledge than younger men, whereas around the age of 55, the gender gap appears to be negligible. For men, in contrast, age appears to be much less relevant for financial literacy. Overall, this highlights the need for targeted education measures to foster financial literacy and inclusion particularly in younger women.

On the newly developed digital financial literacy score, Austria only ranks slightly above average. The instrument used is still considered preliminary by the OECD/INFE and may focus too narrowly on fraud and risk prevention. Indeed, in Austria, the digital financial literacy score is not associated with the number of digital financial services used, casting doubt on its construct validity. Digital financial literacy may thus require a broader definition that incorporates skills to navigate and make use of digital financial services to one’s own benefit.

The ultimate goal of financial literacy is financial well-being. Average financial well-being in Austria appears to be equally high, by international comparison, as financial literacy. Concerning sociodemographic variables, we find a positive relationship between income and financial well-being. Notably, we find large differences between age groups in this context, with respondents below the age of 24 reaching only about half the financial well-being score of respondents aged 75+. Moreover, women also tend to show lower financial well-being than men. Apart from differences in financial literacy, these gaps in financial well-being may be explained by differences in socioeconomic and sociocultural factors related to respondents’ employment status, the distribution of care work and their asset situation.

Financial well-being is positively correlated with the overall financial literacy score. However, we find that financial literacy appears to be a necessary but not a sufficient condition for high financial well-being, as we find numerous observations combining high financial literacy and low financial well-being, but hardly any observations with the opposite combination. This shows that financial well-being is determined by individual financial competences on the one hand and personal economic conditions and context factors on the other (see e.g. ANZ, 2021; Warmath, 2022). Financial literacy should thus be considered an important prerequisite of financial well-being but not a silver-bullet against financial vulnerability or hardship (see Voith and Mauser, 2024).

Moreover, the components of financial literacy show differential relationships with financial well-being across income groups. Financial knowledge appears to be most beneficial for people with medium incomes, while high scores in financial behavior seem mainly relevant for those with lower incomes. Consequently, the financial literacy construct may benefit from being differentiated more explicitly into skills necessary for day-to-day financial management on the one hand and skills related to long-term planning and investment on the other. Such differentiation might serve as a basis for need-based education measures that are relevant in people’s current financial situation. This recommendation is related to the call for “just-in-time” financial education that aims to equip individuals with skills when they become relevant in specific financial situations (see Fernandes et al., 2014; Gibson et al., 2021), such as taking out loans, opening a brokerage account or repaying loans.

Nevertheless, these results cannot account for the dynamics of financial circumstances in people’s lives, where needs may change both gradually and abruptly. In practical terms, need-based approaches can hardly prepare for changing financial circumstances in general. Financial educators thus need to strike a balance between imparting foundational knowledge that may appear irrelevant at the time and providing need-based solutions tailored to financial circumstances or potentially pivotal financial decisions at a suitable time and place.

Lastly, Austrian residents have shown a notable lack of long-term orientation and optimism regarding their financial situation, as expressed in attitudes, behaviors, the holding of financial products and financial well-being. Financial attitudes and behaviors might thus be key to strengthening people’s agency and self-efficacy in financial matters. Potential may be found in encouraging more people to set themselves long-term financial goals. In this context, however, the influence of economic opportunity as a major determinant of saving and long-term thinking should not be ignored, as only people with sufficient financial resources have the chance to save significant amounts on a regular basis (see Fessler et al., 2023).

While the results presented in this report can be considered representative of Austria’s resident population, they are subject to several limitations. The measurement approach used in the ISAFL and ASFL reflects a pragmatic approach to gage financial literacy and related variables internationally and may thus be subject to limitations typical for international measurement exercises. In particular, the instrument may not be equally valid across different countries and cultures, results may be biased due to the self-reported character of the data, and different sampling and mode effects may further affect the validity of results. Moreover, we cannot make any claims on causality. Indeed, socioeconomic and context variables, financial literacy and its components and financial well-being are all likely to have complex and reciprocal relationships. Also, we cannot directly relate our results to financial education measures and their characteristics. In this regard, more research on the effectiveness of financial education in general, and on the aspects of its design in particular is needed.

Overall, we find encouraging evidence of high financial literacy in Austria. By international comparison, Austria’s scores are high in financial literacy and financial well-being, and we observe positive trend over time in financial knowledge. This may, at least in part, be attributable to the extensive education efforts already undertaken by public, nonprofit and private actors to improve Austrians’ financial literacy, as reflected in the national financial literacy strategy for Austria and its numerous financial education measures. Nevertheless, our analyses reveal gaps in specific areas of financial literacy among certain parts of the population, which may negatively affect their financial well-being. We thus expect that our results and analyses indicate potential avenues for future research and inform financial education measures aimed at further enhancing financial literacy and financial well-being in Austria.

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Annex A: additional charts and tables

A.1 Robustness check of changes in financial literacy scores between 2019 and 2023

To make sure that differences in financial literacy scores between the ASFL 2019 and the ASFL 2023 are not attributable to sample or mode effects, statistical significance in financial literacy scores between waves was tested by regression analyses. Having pooled the data for both waves, first, regressions were run using only the wave dummy as explanatory variable. Then, in a next step, control variables for survey mode, age, age squared, gender, education, household size, region and municipality size were added to the model. Survey weights were adjusted to ensure that the total sum of weights was the same for both waves, while maintaining the relative size of weights within each wave. Chart A1 displays the changes in financial literacy scores between the 2019 and 2023 waves with (red) and without (blue) controls. Error bars represent 95% confidence intervals.

A.2 Robustness check of changes in financial knowledge between 2019 and 2023

To show how the probability of correctly answering a financial knowledge question changed between the 2019 and 2023 ASFL waves, we ran logistic regression models for each item used to construct the financial knowledge score. Following the same approach as for the financial literacy scores (see A.1), chart A2 shows the changes in the probability of respondents correctly answering a financial knowledge question between the 2019 and 2023 ASFL waves with (red) and without (blue) controls.

A.3 Financial literacy and financial security issues

A.4 Regression of financial well-being on financial literacy and household income

Annex B: survey questions

For the survey questions, please refer to the pdf version of this report: https://www.oenb.at/dam/jcr:ce083d11-f899-4dc5-bdb5-43a32a537b84/report-2024-13-financial-literacy.pdf