According to the definition adopted by the World Health Organisation (WHO), “Health is a state of complete physical, mental, and social well-being and not merely the absence of an objectively existing disease or disability” (World Health Organization, 1946). However, it appears that in addition to the three areas mentioned by the WHO, a fourth key area of health can also be identified that directly and indirectly affects people’s quality of life – financial health.
Financial health refers to a person’s overall financial situation and the absence of stress related to finances. People feel financially healthy when their financial obligations, such as loan instalments or contractual payments, account for only a small percentage of their income. They also feel financially healthy when they can afford necessary purchases without fear of running out of money before their next payday. Another aspect is financial security, which is supported by having a secure source of income and/or adequate savings, and ideally, by generating profit through investments.
Maintaining financial health requires both economic and financial knowledge as well as the ability to reduce stress related to financial insecurity. A sense of security can be provided by an adequate income and the ability to save, which leads to the accumulation of a satisfactory amount of funds. It also comes from the ability to properly manage financial risk, which translates into making sound investment decisions and other adequate financial choices in situations involving the risk of financial loss or liquidity issues, such as taking on credit, gambling, or purchasing insurance.
The recent years marked by the Sars-Cov-2 pandemic, rising interest rates, record-high inflation in the European Union (EU annual inflation reached a peak of 9.2%, more than triple the 2.9% recorded in 2021, according to Eurostat 2023), and the war in Ukraine, have particularly demonstrated the importance of financial health for human functioning. Financial regulators and supervisors have also acknowledged the importance of financial health and the risks associated with financial choices. This recognition has led to increasing legislative regulations that impose obligations on financial institutions to ensure consumer safety in the context of risky financial decisions. Examples include Recommendations T and S, the Consumer Credit Act, the Mortgage Credit Act, the EBA Guidelines, directives of the European Parliament and Council, and the MiFID and MiFID II regulations, among others.
Financial health is strongly linked to other aspects of human well-being. It can directly influence physical health, as a better financial situation is undeniably associated with improved access to health services, more frequent preventive check-ups, and reduced exposure to factors that cause illness through prolonged stress or exhausting, low-paid work. Financial health also affects social well-being. Beyond its functional roles – as a means of payment, a measure of value, a store of value, and a means of saving – money also has symbolic roles. It supports interpersonal relationships, community, and cultural functioning (Bloom, 1994; Gąsiorowska, 2008). It can also be used to gain and maintain esteem, social acceptance, approval, security, love, and self-satisfaction (Hantley and Wilhelm, 1992).
Furthermore, financial health has an important relationship with mental health. Financial variables may be associated with psychological distress (Dijkstra-Kersten et al., 2015; Lorant et al., 2007; Orpana, Lemyre, and Gravel, 2007). A person’s mental health can be linked both to objective indicators of their financial situation (Bridges and Disney, 2010; Fitch et al., 2011; Wildman, 2003) and to their subjectively perceived financial situation (Wilson et al., 2020; Dijkstra-Kersten et al., 2015; Ferrie et al., 2003). Psychological distress may also be related to individual characteristics such as materialism, economic optimism, or willingness to take financial risks (Kahle et al., 2003; Maner and Schmidt, 2006; Muniz-Velazquez, Gomez-Baya, Lopez-Casquete, 2017). A study conducted during the Sars-Cov-2 pandemic by Sekścińska and colleagues confirmed that both objective and subjective financial circumstances, as well as individual financial characteristics, play a significant role in explaining levels of perceived psychological distress, including anxiety and depression. Among these, individual characteristics were found to be the most significant (Sekścińska et al., 2022). The study also confirmed the importance of risk propensity, materialism, optimism, and financial security as key factors in explaining psychological distress in health- or life-threatening situations.
It follows that financial health should be a priority for every individual, as it supports healthy functioning in other areas of life. But is this truly the case? What does financial health mean to Europeans? How important is it to them? Do they actively take care of it? And are they financially healthy? Finding answers to these questions is vital for planning actions that can improve the well-being of Europeans – both directly in the area of financial health and indirectly in the areas of physical, mental, and social health.
The Aim of the Study
The study aimed to examine the indicators and predictors of Europeans’ financial health and the differences in financial health levels across countries. It also sought to explore how Europeans define financial health and the importance they attribute to it.
The study specifically examined:
- The financial situation of respondents
- Their sense of financial security and stability
- Planning and achievement of financial goals
- Self-assessed financial knowledge and skills
- The state of financial liabilities
- The level and type of financial safeguards
- Financial preparedness for retirement
- The degree of financial control
- Europeans’ attitudes toward money
Survey Methodology
The research was conducted using the CAWI (Computer-Assisted Web Interview) method via the international research platform Toluna in the Czech Republic, France, Germany, Hungary, Italy, Slovakia, Spain, Sweden, and the United Kingdom. The Polish sample was surveyed through the Ariadna National Research Panel. The survey took place from 26 June to 5 July 2024 in Poland, from 15 to 18 July 2025 in the Czech Republic, and from 24 April to 5 May 2025 in the other countries.
Participants in the Study
A total of 14,318 adult Europeans took part in the survey. This included 1,650 Britons, 1,200 Czechs, 1,675 French respondents, 1,500 Germans, 1,000 Hungarians, 1,625 Italians, 1,068 Poles, 1,000 Slovaks, 2,600 Spaniards, and 1,000 Swedes. The international sample was representative of each country in terms of gender and age, and it was diverse in terms of education and place of residence.
Conclusions of the Study
This comprehensive report examines European adults’ self-assessed financial knowledge and skills, money management behaviours, debt levels, savings habits, retirement preparedness, and attitudes toward money. Taken together, these factors provide a detailed picture of financial health across Europe, based on data from 12 countries. The analysis reveals significant variations across countries and demographic groups, offering a nuanced understanding of financial well-being and highlighting areas that require improvement and targeted intervention.
Key Insights and Recommendations
The findings present a complex picture of financial well-being in Europe:
- Knowledge Gaps and Confidence Discrepancies: Basic financial literacy is widespread, but knowledge of complex financial products and systems remains limited. Current levels of financial literacy do not always translate into healthy financial habits, which are essential for long-term financial health. Practical and engaging financial education is required to promote simple and consistent practices that ensure financial security and stability.
- Financial Control Challenges: Many people lack a precise awareness of their income and expenses, which poses a risk of financial instability. However, this also reveals potential for improved financial management and investment. Regular financial health checks should be promoted as a new, trendy routine to encourage greater awareness.
- Behavioural Support Needs: Bridging the gap between setting goals and achieving them requires targeted behavioural interventions and practical tools. Financial education resources, simple automated monitoring tools for consumers, and professional support should work together to improve outcomes.
- Debt and Savings Management: While debt is common, many individuals manage repayments responsibly. Savings habits are less consistent, though some countries show promise. Efforts are needed to encourage people to move assets from non-interest-bearing accounts and cash into working assets and investments.
- Emotional and Cognitive Dimensions: Money’s emotional impact and materialistic perceptions influence behaviours and overall financial well-being. Confidential, non-sales consultations with professional and trustworthy advisors can help people gain confidence in financial planning and adopt simple strategies to reach life goals.
- Country- and Gender-Specific Tailoring: While many financial health characteristics are shared across the EU, some countries face distinct challenges and cultural attitudes that require tailored educational approaches. Gender differences, although modest, also suggest the value of tailored engagement strategies.
- The Role of Financial Advice: Across all surveyed countries, individuals rely on financial advisors – whether through formal consultations, digital platforms, or informal guidance – to navigate financial decisions. This reliance highlights the critical importance of accessible, high-quality financial advice. Since financial literacy alone often does not drive sound financial behaviour, professional advisors play a vital role in guiding the emotional aspects of investor behaviour. This has been supported by numerous studies, including research by EFPA Europe (EFPA Think Tank 2021, 2023, 2025). To strengthen citizens’ financial well-being, it is essential to continue researching what constitutes effective, trustworthy, and impactful financial advice, and to promote standards that ensure its quality and relevance across diverse contexts.
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