Speech by Minister McGrath at CCPC launch of Report on Financial Well-being in Ireland: Financial Literacy and Inclusion in 2023

Check against delivery

I am delighted to be here this morning and I would like to thank the CCPC for inviting me to speak at the launch of this Report.

As we consider how to move forward on this important issue, it is essential that we take stock and establish the current levels of financial literacy and well-being of our population today.

The Global Financial Crisis, COVID-19 and the ongoing cost-of-living challenge have all highlighted the need to:

• support people in understanding their financial affairs, and
• provide them with the tools needed to make decisions and secure their long term well-being

It is also important that when we are talking about financial literacy, we take a whole-of-life approach. Financial education and any interventions are required on an ongoing basis throughout a consumer’s life – to help them make good financial decisions and develop good behaviours and skills around their money and managing their financial affairs.

Financial education should not stop at the school gate. It should continue into adulthood, when important financial decisions are made, through workplaces, community organisations, adult education programmes and through financial providers at key decision points in a consumer’s financial journey.

The CCPC has a very important statutory role to play in the area of financial education and information, providing consumers with free independent impartial information.

Kevin has already mentioned the range of ways through which it does this, and I would just like to reiterate the practical helpfulness of all of these channels, whether it is the very useful information on the CCPC website, their public awareness campaigns or their workplace programmes. The mortgage comparison tool on their website alone was accessed over 300,000 times last year, clearly demonstrating that this resource is a very helpful tool for consumers.

I would like to acknowledge the significant work that has been undertaken by the CCPC in this area in recent years and I look forward to continuing to work closely with them in the future.

I very much welcome this CCPC Report, and look forward to hearing the results from Indecon in a few moments.

These results will give us a clear baseline of the level of financial literacy in Ireland and very rich information to use as we progress our work.

To that point, I would like to speak a little about that work.

As many of you here today will know, my department conducted the Retail Banking Review over the course of 2022.

At the Retail Banking Dialogue in Tullamore last May, the need for a focus on financial literacy came across strongly in the breakout sessions.

In its final Report, published in November, the Review recommended that my department should seek to ensure that all stakeholders work together so that Ireland is compliant with the OECD High Level Principles on Financial Consumer Protection and the Recommendation on Financial Literacy.

The OECD is a global leader on financial education, and it is a topic that my officials and I touched on with the Secretary General of the OECD when I met him in May.

The OECD set up an International Network on Financial Education in 2008 which develops research, best practice and policy instruments in this area.

The 2020 OECD Recommendation defines financial literacy as:

“a combination of financial awareness, knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve individual financial well-being.”

It recommends the implementation of national strategies that take a sustained and co-ordinated approach to financial literacy.

This OECD Recommendation is intended as an instrument to assist governments, public authorities and other relevant stakeholders in their work to design, implement and evaluate financial literacy policies. It sees this as an integral part of financial consumer protection, market conduct as well as financial inclusion.

Separately, the updated G20/OECD High-Level Principles on Financial Consumer Protection, adopted in 2022, now include Financial Literacy and Awareness as a standalone principle.

The Central Bank’s Discussion Paper on the Review of the Consumer Protection Code published last October, followed the Themes of the G20/OECD High Level Principles, and sought feedback from interested stakeholders on financial literacy and financial education in Ireland.

I look forward to seeing the feedback to that Discussion Paper on this matter, and considering how it can assist us as we move forward with this important work.

In order to deliver on the Banking Review recommendation and meet the various OECD obligations, my department will lead the development of a national strategy on financial literacy for Ireland.

I am delighted to announce that I have recently established a new Unit in my department to work on this strategy with two staff very graciously seconded from the CCPC to work alongside my own officials.

I am happy to be leading the charge, but I know that any cohesive approach needs the involvement of stakeholders from across government, public bodies, the financial services industry and charities/NGOs.

These stakeholders are already doing a lot of good work and we will look to build on that base to ensure that we are all working together and avoiding any duplication of effort.

The initial phase of this work will be to conduct a mapping exercise of relevant evidence and analysis. This will involve:

1. Establishing levels of financial literacy and well-being of the population. Today’s Report from the CCPC is a key evidence base and I am grateful for the work done by the CCPC to present the Irish findings now to help inform this discussion.

2. Gathering information on the existence of and access to financial literacy programmes across the population and specific subgroups.

3. A review of relevant national and international examples, good practice, research and literature to identify operational and replicable practices.

4. Engaging with our international peers who have financial literacy strategies in place, learning from their experiences.

5. Identifying areas of financial literacy gaps to be closed.

6. Identifying possible target audiences for interventions.

We will be engaging with the OECD and European Commission, in particular, to meet best international practice and look forward to talking to all of the stakeholders at home, many of whom are here today, about what a joined up approach could look like.

In conclusion, I would once again like to thank you for the opportunity to speak with you today to welcome this important evidence base.

My officials will be engaging with many of you as we progress our work on this strategy and I look forward to speaking to you again on this important topic in the future.

More immediately, like yourselves, I am looking forward to hearing more from Indecon about the findings in this report. Congratulations to all involved.