What Italy Tells Us About the Problem of Financial Literacy in Europe

Financial literacy in Europe has a problem — and Italy illustrates it more sharply than almost any other developed nation. In the 2022 PISA assessment, Italian 15-year-olds scored 484 points — below the OECD average of 498. Among adults, the picture is starker still: Italy placed 36th out of 39 countries in the 2023 OECD adult financial literacy survey, behind nations like Thailand and Uruguay, despite being a G7 economy.

The consequences reach further than most people realise. Europe’s households sit on roughly €11 trillion in private savings — the vast majority of it parked in low-yield accounts, quietly losing ground to inflation. Retirement is the other pressure point: research by Stanford’s Annamaria Lusardi suggests financial literacy alone can account for up to 40 per cent of the gap in individual wealth at retirement age. Not income. Not education level. Knowledge.

This article is part of the Sweat Your Assets series on financial education in school — a topic I care about not just as a writer, but as someone who has sat in classrooms in Oslo and beyond, trying to give young people the tools most schools still don’t teach. I use Italy as a window into a broader European challenge: why financial literacy gaps persist, what they cost, and what countries that get it right are actually doing differently. Whether you’re saving for retirement, building an investment habit, or raising children who understand money — this affects you.

A Museum in Turin That Teaches What Schools Don’t

Tucked inside Turin’s old Roman district, there is a place called the Museum of Saving. It is unlike any museum you’ve probably visited. No Renaissance paintings, no Roman artefacts, no hushed reverence for the distant past. Instead: a miniature cinema, interactive digital installations, and a remarkable collection of piggy banks from over 100 countries, some dating all the way back to the 1600s.

People come here to learn about money. And remarkably, they leave having done so.

On a school visit, a class of nine-year-olds talked openly and curiously about their finances — without embarrassment. One girl, Eleonora, is saving to buy a horse. Her classmate Lorenzo had accumulated €100 and wanted to save another €100 for “all the toys I want.” Another student, Cecilia, was already thinking further ahead: “I’m keeping it for when I’m older, so I could buy a small house if I want to live on my own.”

Nine years old. Thinking about home ownership.

What makes this remarkable is not the sophistication of their plans, but the ease with which they discuss money at all. Because just a few years later, as teenagers and adults, most Italians stop talking about money entirely.

The Taboo That Costs Billions. Financial Literacy in Europe

Here is a statistic that surprised me: 40 per cent of Italians aged 18 to 34 never discuss money at home. The same proportion feel genuinely uncomfortable talking about finances — not with strangers, but with their own families.

This matters, because how we talk about money shapes how we understand it. And how we understand it shapes every financial decision we make for the rest of our lives.

The data confirms the problem runs across generations.

Start with students: in the 2022 PISA financial literacy assessment — which tested 15-year-olds across 20 countries — Italian students scored 484 points, below the OECD average of 498. Belgium and Canada were the top performers in that cohort; Italy sat in the lower half.

Now look at adults: in the 2023 OECD/INFE International Survey of Adult Financial Literacy, which covered 39 countries worldwide, Italy placed 36th. Only 16.6 per cent of Italian adults reached the minimum acceptable score for informed financial management. To put that in perspective: Italy is a G7 economy that scores below countries like Thailand and Uruguay on basic financial knowledge.

Both surveys test the same core concepts: What is inflation? How does compound interest work? Why is it wise to spread your investments? These are not obscure ideas. They are the foundation of every financial decision a person makes across a lifetime — from choosing a mortgage to building a retirement fund. And millions of Italians, at every age, are navigating those decisions without them.

Let’s be concrete about what this means. If you don’t understand inflation — the idea that money loses a little of its purchasing power every year as prices rise — you might keep all your savings in a bank account and feel perfectly content. But if inflation is running at 3% a year and your account earns 0.5%, you are losing ground every single year. Your balance grows in numbers on the screen. But it shrinks in real value — in what that money can actually buy.

This is not advanced finance. It is basic financial survival. And millions of Italians don’t know it.

Figure 1 — PISA 2022 Financial Literacy Scores, OECD countries (15-year-olds). Source: OECD PISA 2022 Vol. IV. Sweat Your Assets Analysis.

→ Read more: Financial Literacy, by OECD — a detailed breakdown of global standards

Why Italy? And Why Does Culture Matter So Much?

Giovanna Paladino founded the Museum of Saving specifically to address this problem. She traces Italy’s discomfort not to any single policy failure, but to something older: culture.

“We come from a Catholic and Latin culture where money has a negative connotation,” she says.

“It’s associated with greed and avarice.”

Southern Europe

This resonates well beyond Italy. Across much of Southern and Eastern Europe — Romania, Portugal, Cyprus, Spain, Greece — money is something to be slightly ashamed of discussing.

Wanting more of it is morally suspect.

Northern Europe

In Northern Europe, the cultural attitude is different. In Germany, Sweden, Finland, the Netherlands, and Estonia, money tends to be treated as a practical tool: something you manage, discuss openly, and put to work.

The result is measurable, as the chart above shows.

Culture is not destiny. But it does shape what people learn, what they dare to ask, and what they quietly avoid. For generations, the avoidance of money talk across much of Europe has compounded quietly in the background.

I’ve written elsewhere on this site about Voltaire’s instruction to “cultivate your own garden” — the idea that financial self-reliance begins with a decision to take your situation seriously and tend to it. But you can’t tend a garden you’ve been taught to feel guilty about entering.

The €11 Trillion Problem — And Why It’s Yours Too

European households collectively hold approximately €11 trillion in private savings — a sum roughly equivalent to the United States’ annual economic output.

And the vast majority of it is sitting in bank accounts, earning very little — or, in real terms, losing value quietly to inflation year after year.

Why? Because when people don’t understand investing — what a stock or a bond is, how a diversified index fund works, why patient long-term investing rewards those who stay the course — they default to the familiar.

A savings account feels safe. The number goes up a little each month, and that feels reassuring. The fact that inflation is quietly eating the real value is invisible and, therefore, easy to ignore.

The relationship between financial literacy and investment behaviour is one of the most consistent findings in economic research: the less financially literate a population is, the higher the share of savings held in cash rather than in productive investments.

This is not about income — it is about knowledge.

Now imagine redirecting even a fraction of that €11 trillion toward productive investments: businesses needing capital to grow, infrastructure projects, clean energy ventures.

That money would generate real returns for the people who invested it, and fuel economic growth for everyone else. Instead, it sits idle — not because people are careless, but because most were never taught what to do with it.

The scale of this is not lost on Europe’s institutions. In a 2024 article in The Economist, ECB President Christine Lagarde pointed to the same gap from a different angle: European households hold one-third of their financial assets in cash and deposits, compared with one-tenth in America. Redirect even part of that toward productive investment, she argued, and up to €8 trillion could re-enter capital markets. The policy levers matter — but so does the knowledge needed to use them. I wrote about Lagarde’s analysis here.

Stefano Cappiello, director-general for financial regulation at the Italian finance ministry, puts the collective cost plainly:

“If you don’t ensure that all citizens are aware and educated, it will have a tremendous social cost.”

Figure 2 — Growth of a €10,000 investment at 7% per year over 30 years:compound vs simple interest.

→ Read more: Financial Freedom and the Snowball Effect — how compound interest actually works

The Pension Problem Nobody Wants to Talk About

Most Europeans — particularly in Southern Europe — grew up expecting a state pension: a regular payment from the government from retirement until death. For generations, this was reliable and relatively generous. But the maths depends on a simple equation: enough working-age people paying contributions to fund retirees.

That equation is under severe strain. Europe’s population is ageing rapidly. Birth rates have fallen. There are fewer young workers relative to older retirees every decade, and that imbalance will deepen. In Italy, pension expenditure already represents the second-highest share of GDP in the EU. Citizens who have never saved or invested independently are especially exposed.

Annamaria Lusardi, senior fellow at Stanford’s Institute for Economic Policy Research, has spent decades studying the relationship between financial knowledge and retirement outcomes.

Her most striking finding: financial literacy — not income, not education level, not career choice — can account for up to 40 per cent of the difference in individual wealth at retirement age. Forty per cent. From knowledge alone.

“We want people to really grow their savings,” she says, “because governments aren’t going to be able to provide generous pensions.”

→ Read more: How to Calculate Your Financial Freedom Number — step-by-step guide

What Sweden Got Right — And What Others Are Still Learning

Italy’s struggles are not inevitable. They are the product of choices — cultural, political, and educational — that other countries have made differently. Sweden is the clearest example of what a sustained commitment to financial education actually produces.

Sweden has taught financial concepts since the first grade. In 2011, it made financial education compulsory at upper secondary level — and, crucially, didn’t treat it as a standalone subject. Instead, it was woven into existing classes: compound interest in mathematics, household budgeting in home economics, how the economy works in social studies. Money became something students encountered naturally, as part of understanding the world.

In 2012, Sweden introduced the Investeringssparkonto, or ISK — a simplified investment account with a flat annual tax and pre-filled tax declarations. The friction of investing was almost entirely removed: clear, tax-efficient, easy to use. Notably, Sweden did not participate in the 2022 PISA financial literacy assessment — its student results are not available for direct comparison.

But its adult outcomes speak for themselves.

Figure 3 — Adults holding investment products (%). Source: Eurobarometer / Swedish Ministry of Finance.

The adult data tells the story plainly. Today, 46 per cent of Swedes hold investment products. The EU average is 24 per cent. Italy sits at around 14 per cent. Swedish capital markets are among the most dynamic in the bloc. The contrast with Italy is not a matter of wealth or economic development — it is a matter of decades of deliberate policy.

The lesson is clear: financial literacy is not a cultural trait some nations are born with and others are not. It is taught. It is a policy choice.

And when a country chooses not to make it, the cost shows up — in savings accounts that quietly erode, in retirement funds that never materialise, in generations that arrive at major financial decisions without the tools to make them well.

→ Read more: The Goose and the Golden Egg — on protecting your wealth-generating capacity

Schools Are Not Enough on Their Own

When governments commit to financial education in schools, they run into a thorny problem: who actually delivers it?

Italy passed a law in 2023 making financial education compulsory. The majority of headteachers report that initiatives have been launched — real progress. But implementation is left to individual schools, many of which lack budget, staff expertise, or ready-made materials.

So they outsource it. And who steps in? Frequently, banks and financial services companies — organisations that are, whatever their stated intentions, also in the business of selling financial products.

Donato Masciandaro, professor at Milan’s Bocconi University and president of Italy’s financial education committee, puts it plainly:

“Private and public providers have discovered financial education is an extraordinary marketing tool.”

In the UK, where financial education has been compulsory for years, the overwhelming majority of freely available classroom content is bank-branded. When a twelve-year-old’s first introduction to investing carries a bank logo, that is not education. It is a long-term advertisement.

Italy’s national committee — Edufin — has responded by certifying educators who meet criteria of quality, impartiality, and free access. It is a sensible model other countries should study seriously.

The Signs of Progress among Italian Students

There are real reasons for optimism, even starting from the bottom.

In the most recent PISA financial literacy assessment of 15-year-olds, Italian students scored 484 points on average, up from 466 a decade earlier.

They remain below the OECD average of 498, but the trajectory has reversed. As Magda Bianco, head of consumer protection at Italy’s central bank, puts it:

“We are starting to see the effects now on 15-year-olds.”

This is exactly what you would expect from any long-term investment. The returns are not immediate. But they compound.

A generation of children who grow up understanding savings, interest, and risk don’t just become more financially secure adults. They become people who are harder to exploit, less dependent on strained state systems, and more likely to pass financial wisdom on to their own children.

What You Can Do Right Now

If you’re here, you’re already doing something most Europeans are not: actively choosing to understand your finances rather than leaving them on autopilot. That choice, sustained over years, is worth an enormous amount.

Talk about money — especially if you have children. Children who grow up hearing their parents discuss budgeting, saving, and investing — even casually at dinner — develop financial habits that shape their entire adult lives. You don’t need to be an expert. Ask your kids what they’d do with a €50 birthday gift. Make money a normal topic, not a shameful one.

Understand the basics — they’re less complicated than they sound. Inflation, compound interest, and diversification underpin almost everything in personal finance. They are not obscure ideas. Anyone can learn them, at any age, and use them immediately. And the earlier you start, the harder they work for you.

Push for better financial education where you live. The quality of financial education in your country’s schools, the design of investment accounts, the independence of financial regulators — these are decided by policymakers who respond to what citizens demand. A population that understands money well enough to ask good questions is harder to exploit and harder to ignore.

The Bottom Line

“Financial literacy is not a gene,” as Annamaria Lusardi puts it. You are not born knowing how money works. Nobody is. It is taught — or it isn’t. And for too long, across too many European countries, it hasn’t been.

The children in Turin’s Museum of Saving are a reminder of what becomes possible when that changes. Nine-year-olds who discuss saving, investing, and their futures with ease don’t just grow into more financially secure adults.

They become citizens who are harder to deceive, less dependent on struggling state systems, and more capable of building the kind of wealth that changes the trajectory of their own families.

Europe’s €11 trillion in idle savings is not a fixed fact of nature. It is the accumulated consequence of generations of silence around money. That silence can be broken — one conversation, one classroom, one generation at a time.

The sooner the learning starts, the more it compounds.

Enjoy the articles and… Sweat Your Assets.

If you like this post on the challenges of Financial Literacy in Europe, check out other Financial Wisdom in my Archive, YouTube videos, and Audio Podcasts.