Financial Stress Survey: How the Pandemic Has Affected Financial Stress Levels
The pandemic has posed many challenges. Some are obvious, like reduced movement, working from home, and health concerns. But others are far more subtle, and this includes the financial stress that it has caused to employers and workers across the country.
To better understand the effects of financial stress on people, Manulife conducted its annual Financial Stress survey. The study looked at how employees were feeling about their finances, with both short-term (like an emergency savings account) and long-term (retirement plans) goals being taken into account.
There was a clear takeaway from the survey -- people are stressed about their finances, and the COVID-19 pandemic has increased this stress. In fact, Manulife’s survey found that the number of respondents who indicated they had high levels of financial stress more than doubled from pre COVID numbers, from 11% to 27%. In the US these numbers were even more pronounced, with a jump from 8% pre COVID to 26% since the pandemic reporting high levels of financial stress.
Another key indicator of this stress is how people's finances have been impacted in the short term. In Canada, 51% of respondents had to dip into their emergency savings, or increased the balance on their credit credit cards since the pandemic. And most people feel it’s going to be like this for a while, with only one-third of survey respondents indicating they feel like their financial situation will improve in the coming year.
Luckily, it isn’t all bad news, with some positive data being gleaned as well. Among this, the survey indicated that people are far more interested in seeking financial advice from a professional, something Brett Marchand, Head of Canada Retirement, strongly encouraged in his latest article. While in 2019 only 50% of respondents suggested they’d seek professional advice, 63% were interested in doing so since the pandemic.
The data also showed there was an opportunity for employers to alleviate some of the financial stress faced by their employees. In fact, 75% of those asked claimed that an employer-sponsored wellness program would have a positive effect on their stress, and a full 90% feel it is important for employers to offer financial wellness programs.
While the pandemic has caused people a great deal of stress, it has also highlighted the important role an employer can play in the financial security of their employees. It has also helped people prioritize seeking professional financial advice, a positive step to take for long term financial wellness.