Luís Quaresma
26th May 2025
Recent studies on financial literacy highlight alarming consequences of the lack of financial education in Portugal’s public school system. According to The State of Financial Knowledge in the European Union, Portugal ranks as the second-lowest country in the EU for financial literacy, surpassing only Romania. As Portugal approaches the 40th anniversary of its integration into the EEC (now the EU) in 2026, this statistic is a sobering wake-up call.
Óscar Afonso, Dean of the Faculty of Economics at the University of Porto (FEP), recently emphasised in a newspaper article that financial literacy is among the critical structural reforms Portugal urgently needs. This may be the most vital reform to empower a society capable of making informed financial decisions, buying a coffee at Starbucks, using “buy now, pay later” options, or opening a bank account. Many people overlook the long-term costs of these everyday choices.
The Scale of the Problem
A 2024 study by NOVA Information Management School (NOVA IMS) revealed that 64% of Portuguese adults have low levels of financial literacy, worse than Germany’s 38% in 2009. This should alarm every Portuguese citizen for a simple reason: we all rely on money to live, yet most of us lack a basic understanding of how it works. From grasping concepts like inflation, the difference between debit and credit cards, or the power of compound interest, many are left in the dark. The same study found that 45% of Portuguese respondents had never made any investments, and only 38% were even considering it.
Why are only 38% of people contemplating investments that could transform their financial future? For example, if someone earning Portugal’s minimum wage (approximately €900 per month) invested just €50 monthly, they could amass over €200,000 by the end of their career, assuming a 7% annual return (the market average minus inflation).
This would result from just €31,000 invested, with the remaining €173,000 generated through compound interest. This starkly contrasts with saving in a traditional bank account, hoping for a decent pension, without understanding inflation or investment fundamentals.
The Path Forward
Each year, initiatives like those organised by the FEP Finance Club aim to prepare future generations for a world where financial literacy is as essential as history, science, or mathematics. While these programs, which visit schools to discuss money and finance, are valuable, their impact is limited. Operating primarily in the Porto area and constrained by brief, two-hour presentations, they cannot fully address the gap in financial education.
The solution is clear: financial literacy must become a mandatory subject in Portuguese schools, starting at an early age. Norway, a global leader in financial literacy according to the S&P Global Financial Literacy Survey, provides a model. With mandatory financial education embedded in its national curriculum, Norway equips students with practical skills like personal budgeting, understanding credit and debt, and making informed decisions about savings and investments. This approach ensures schools serve as a social elevator, empowering students to make sound financial choices and break cycles of poverty.
If Portugal continues to neglect financial education, future generations will struggle to escape poverty and climb the social ladder. By prioritising financial literacy in schools, we can build a society that is not only informed but also empowered to thrive in an increasingly complex financial world.