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Korean adults' financial literacy declines amid poor inflation understanding: BOK
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By Lee Kyung-min
More Korean adults had a lower level of financial literacy in 2024 compared to two years ago, driven by difficulty in understanding how inflation affects real purchasing power, a central bank report showed Tuesday.
People in the 50-59 age group and high-income earners had an improved understanding of financial issues, aided by greater interest in post-retirement planning and asset management.
However, scores dropped for younger adults, the elderly and low-income earners, further deepening the gap between different social and economic classes.
Still, Korean adults’ financial literacy was better than the OECD average.
According to a survey by the Bank of Korea (BOK) and the Financial Supervisory Service, Korean adults aged 18 to 79 had an average financial literacy score of 65.7 in 2024, down from 66.5 in 2022.
The OECD average was 62.7 in 2023.
The score on financial knowledge came to 73.6 in 2024, down from 75.5 in 2022.
The dip is explained by a sharp drop in the number of respondents who correctly understood whether and by how much inflation influences real purchasing power.
The score fell to 56.6 in 2024, significantly down from 78.3.
The survey also showed that home buying topped the list of long-term financial goals, accounting for 25.8 percent of responses, followed by increasing assets at 19.9 percent and preparation for wedding expenses at 13.9 percent.
The digital financial literacy score of Korean adults came to 45.5 in 2024, up from 42.9 in 2022.
"The findings, which showed that many respondents lacked a clear understanding of how inflation impacts real purchasing power, underscore the growing need for customized financial education programs targeting these specific gaps," a BOK official said.