American Financial Literacy Falls to 10-Year Low as Gen Z Scores Drop to 38 Percent
A new TIAA Institute study found that U.S. adults correctly answered only 47 percent of basic financial literacy questions in 2025, the lowest score in the survey''s 10-year history. Gen Z adults scored the worst at 38 percent, and the share of Americans with very low financial literacy has risen to 25 percent.
American financial literacy has fallen to its lowest point in a decade, with U.S. adults correctly answering only 47 percent of 28 basic financial questions in the latest TIAA Institute-GFLEC Personal Finance Index.
The score is down from a high of 52 percent in 2020. The share of Americans with very low financial literacy, defined as scoring in the bottom 20 percent, has risen to 25 percent, up from 20 percent in 2017.
Gen Z adults, those between 18 and 29 years old, scored the worst at 38 percent correct. Baby boomers had the highest scores at 54 percent. Women answered 44 percent of questions correctly, compared to 50 percent for men.
The consequences are real. Americans with low financial literacy are four times more likely to have trouble making ends meet, according to the study published by CBS News on June 1.
Economists are debating what is driving the decline. Harvard''s John Campbell and Imperial College''s Tarun Ramadorai argue that the U.S. retirement system has become too complex for many people to understand. LendingTree''s Matt Schulz notes that while financial products have evolved, the core principles of saving and investing have not changed, making the decline in scores more troubling.
The study tested knowledge across eight areas, including borrowing, earning, insuring, and understanding risk. Comprehending risk was the weakest area, with only 36 percent of questions answered correctly.
Despite the grim numbers, researchers found that financial education works. People who have received formal financial training score 13 percentage points higher on average than those who have not.
Several states have responded by requiring personal finance courses in high schools. Advocates say the curriculum changes will take years to show up in national literacy scores, but the trend toward mandatory financial education is accelerating.
