From the OCDE website:
“For one thing, the growing sophistication of financial markets means consumers are being offered a variety of complex financial instruments for borrowing and saving, with a large range of options. At the same time, the responsibility and risk for financial decisions that will have a major impact on an individual’s future life, notably pensions, are being shifted increasingly to workers and away from government and employers. As life expectancy is increasing, the pension question is particularly important as individuals will be enjoying longer periods of retirement.
Individuals will not be able to choose the right savings or investments for themselves, and may be at risk of fraud, if they are not financially literate. But if individuals do become financially educated, they will be more likely to save and to challenge financial service providers to develop products that truly respond to their needs, and that should have positive effects on both investment levels and economic growth.
Research indicates that the level of financial literacy is low in most countries, including in developed countries.
In an Australian survey, "67% of those taking part claimed to understand the concept of compound interest but only 28% could find the correct answer to a problem using the concept.”
If you want test yourself and take a short financial literacy quiz, please follow this link:
http://usfinancialcapability.org/quiz.php