The hidden costs of financial stress

In a short period of time, the pandemic completely changed how we live, work, and shop. Our Manulife Canada Retirement Study: Stress, Finances, Well-being1 showed the pandemic increased stress and financial stress among all Canadians with close to half saying it had a negative impact on their mental health. Six in ten reported they have felt lonely at least sometimes or more often in the last year and 57% say they have experienced depression.1

When we're preoccupied, anxious, and stressed, it's hard to feel fully engaged at work and be productive. Among the respondents in our study who worry about their finances, almost seven in ten said they'd be more productive if they didn't spend their time worrying at work.1

Yet some groups were more vulnerable to the stress effects of the pandemic. The most at-risk groups for overall and financial stress were women, younger Canadians under age 36, and those with household investable assets below $100,000.1 Individuals in these groups were more likely to be feeling extremely stressed or financially stressed related to Covid-19.1

Biggest financial worries

Given the changes caused by the pandemic, it's not surprising that in the Manulife Canada Retirement Study more than twice as many Canadians reported major overall stress during the pandemic, compared to pre-pandemic. There was a similar trend for those reporting high financial stress (14% pre-pandemic vs 25% during pandemic).1

Among survey respondents, the top five financial worries were:

  • Insufficient emergency fund savings
  • Insufficient retirement savings
  • Current economic conditions
  • Overall personal financial situation
  • Job security

The good news, four in ten respondents were feeling optimistic things will generally get better in the coming year. Overall, in the next 3 to 6 months, Canadians are focused on these top five financial priorities:1

  • Pay off debt
  • Ensure savings are invested wisely
  • Plan for retirement
  • Save for short-term needs (e.g. new car, vacation)
  • Create an emergency fund

Help wanted: financial wellness programs reduce stress

Feeling worried is a sign that something is off-balance in our lives. Worry can be a catalyst to make some needed changes. When it comes to financial worry, we can stay stuck in a spiral of anxiety which can lead to poor work performance and other negative outcomes, or we can reach out for help in putting our finances on the right track.

According to our study almost eight in ten respondents were interested in receiving recommendations on Canadian Pension Plan strategies, retirement income forecasts, and other financial wellness support.1 Canadians are looking to their employers to provide them with a variety of personal finance tools including how to open an emergency savings account, education savings tools, and how to better manage their budgets amid competing financial demands.1

Challenges are a given in life, but excessive worry is optional. Having the right tools and trusted support helps build our confidence and resilience. 

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