Financial literacy gaps drive low investment rates in Germany

Financial literacy remains a key priority for the German government, the EU, and banking institutions, yet a gap exists between the concept and practical application. While nearly 90 percent of adults in Germany actively save according to OECD analysis, only 18 percent hold investment products such as stocks, ETFs, or funds.

In an interview, Sara Ravan Ramzani, Vice President of Gisma University of Applied Sciences, explains that German household wealth is largely held in low-interest bank accounts rather than capital markets. This trend is attributed to both cultural and structural factors, specifically a conservative saving culture that favors traditional savings accounts over the perceived uncertainty of the stock market. Addressing these knowledge gaps is considered essential for long-term wealth building and meaningful discussions regarding pension reform.