Research: Financial Literacy Could Help Kiwis' wealth

19/08/2026 19/08/2026

Patrick Wang

Research: Financial Literacy Could Help Kiwis' wealth

New research by AUT team suggests financial literacy could make 25 percent more wealthy.

The research was based on the longitudinal data on Dutch households and connected financial literacy measured in 2011 with financial outcomes in 2019 for 475 individuals.

The study indicated that a one-point increase in financial literacy in 2011 was observed to lead to a 12 percent annual income increase relative to the average income in the sample, and by a 25 percent savings increase relative to the average savings in the sample. It is aligned with predictions that there could be up to 40 percent of wealth gap at retirement due to differences in financial knowledge.

Other findings include:

Those people that invested in financial literacy in 2011 were still benefiting from that financial literacy 8 years on.
Younger people tended to earn higher incomes when they were financially literate while older people were more likely to accumulate more savings.
Financial literacy had strong associations with higher income and savings among men, while there were no significant relationships for women.
Previous research has consistently shown that women report lower levels of financial literacy than men.
They supported government initiatives for financial literacy education in schools, which could be starting in Year 1 at primary school in 2027.

New Zealand is mostly likely in the same experience in the findings. It is important for KiwiSaver that KiwiSaver balances could be much different if New Zealanders were provided with more targeted financial literacy education on their retirement savings.

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