Understandably given current events, this year’s PwC Employee Financial Wellness Survey takes a different tone than in prior years.
Typically, the report highlights a wide range of key results and trends. But in light of the pandemic, PwC decided to focus this year’s report, the recently released ninth annual, on the findings they believe are most relevant to helping employers understand the potential impact of COVID-19 on their employees’ financial well-being.
“In doing so, we are also providing suggestions on how organizations may better guide and support their employees through important financial decisions as they attempt to navigate this stressful period of uncertainty,” the report’s intro states. “As with any survey, the results are from a point in time, in this case just prior to the sharp rise in U.S. COVID-19 cases. While the findings are meant to be directional in nature, it is our belief that areas of concern back in January will only be more pronounced today. Our observations and suggestions reflect the realities of the changing employee circumstances we are observing.”
Here are five of the key insights included in the report:
- 54% of employees surveyed say financial or money matters/challenges causes them the most stress, far outpacing the 18% who said their job. Relationships (12%) and health concerns (11%) ranked third and fourth.
- 38% of all employees have less than $1,000 saved to deal with unexpected expenses. By generation, 62% of Gen Z, 37% of Millennials, 34% of Gen X and 37% of Boomers have less than $1,000 saved for an emergency.
- 40% of Millennial employees have a student loan(s) and 74% of them say that their student loans have a moderate or significant impact on their ability to meet their other financial goals. Notably, among the 30% of Gen X with student loans, 75% say the loans are impacting their ability to meet other financial goals (66% for the 21% of Gen Z with loans and 63% among the 11% of Boomers with student loans).
- 53% of Gen X and Millennial employees think it is likely they’ll need to use money held in retirement plans for expenses other than retirement. That compares to just 35% of Boomers and 44% of Gen Z employees. By far the top reason given by every generation was using the retirement money to deal with an unexpected expense.
- Compared to last year, there has been an increase in the percentage of employees who expect to be working in retirement either out of financial necessity or because they want to work. For all employees, the percentage increased from 48% in 2019 to 51% in 2020, and from 50% to 56% for Boomers.
The report concludes by saying employers need to recognize the economic realities of COVID-19 and understand the important role they can play, directly or indirectly, in helping reduce financial difficulties and stress their employees will likely encounter.
“Employees will need objective financial guidance and support to weigh their options as they consider the variety of employer and government benefits available to meet their rising financial needs and growing concerns,” the report states. “Not only is it the socially conscious response for employees reeling from the global pandemic, but it will likely benefit the organization with a more appreciative workforce with greater financial resiliency and engagement.”
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
