Research has shown that poor financial literacy skills can lead to a lower standard of living, lower productivity and greater reliance on government services and support. People who lack financial understanding may not be able to fully contribute to society, resulting in financial and social exclusion. Those with low socio-economic status, Indigenous and culturally and linguistically diverse communities, the very young and the over 70s are most at risk.
Since 2005, the Organisation for Economic Co-operation and Development (OECD) has encouraged countries to invest in financial literacy education. The Global Financial Crisis and its continuing after-effects have reinforced the importance of a strong financial knowledge.
In 2009, the OECD announced that a financial literacy component will be included in the 2012 Programme for International Student Assessment (PISA), highlighting the critical importance attached to financial literacy education.
Australia is participating in this PISA assessment, in which the financial literacy of 15-year-olds will be tested. The Australian Council for Educational Research is developing and implementing the tests with funding provided by ASIC.