Two links must hold for conventional financial education to be effective. Education must improve relevant knowledge and understanding (financial literacy) and better knowledge must change behaviour. Unscrambling causality from correlation is hard. The best empirical work finds that financial education is not likely to have major lasting effects on knowledge and especially on behaviour. Psychology may be the main driver of what people actually do. Some of the principal cognitive biases potentially relevant to the FSA agenda are procrastination, regret and loss aversion, mental accounting, status quo bias and information overload
