Financial stress rates for U.S. workers are among the highest they have been over the last five years, as workers contend with greater financial burdens and debt, according to a new survey by PricewaterhouseCoopers.
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“We’ve been doing the survey for about five years, and this was the first year the numbers went in the opposite direction,” said Kent E. Allison, leader of PwC’s Employee Financial Education and Wellness practice. “When we looked at some of the underpinnings of what was causing concern, they centered around not having enough cash flow to deal with any type of emergency. We’ve been having some instability in the marketplace, and we’re still dealing with challenges around stagnant wages. Being an election year, there’s uncertainty around who is going to driving us going forward.”
Increased financial stress levels are being felt more by millennials (64 percent) than by any other generation surveyed by PwC.
“With millennials, the numbers seemed to be dramatically worse than others,” said Allison. “We decided to look at the overhang of student debt that we’ve been hearing so much about and tried to see what impact it was having, in particular on millennials and those who really were feeling the effects of that debt. When we stripped out the numbers and compared those who felt their student debt was causing them financial stress against those that weren’t, the numbers were pretty dramatic in terms of worsening for those that under the burden of student debt.”
Employees affected by student loans appear to be in worse financial shape than other employees, according to the survey. The stress is being felt most acutely by millennials, with 42 percent of millennial survey respondents indicating they have a student loan, and 79 percent saying their student loans are having a moderate or significant impact on their ability to meet their other financial goals. Workers whose finances are affected by student loan debt are less productive, have more financial stress, are more likely to find it difficult to meet household expenses and are less confident in their retirement preparedness, according to the survey responses.
Employee retirement savings are also an area of concern. PwC data indicates that nearly half of all workers (47 percent) have saved less than $50,000 for retirement and 28 percent of workers are saving less for retirement than last year. More workers are thus postponing retirement.
Employees are spending more time dealing with finances in the workplace, affecting their overall productivity and life outside of work. Twenty-eight percent of the survey respondents said personal finances have been a distraction at work (compared to 20 percent in last year’s survey). Among them, 46 percent indicated they spend three or more hours at work per week dealing with or thinking about issues related to their finances (compared to 37 percent last year). Twenty-eight percent said their health has been negatively impacted by their financial worries, and 23 percent say their relationships at home have been affected.
“Besides the millennials, we’re also seeing some other financial strains coming in on those who are older, in the sense that we’re seeing more people having to deal with the health and financial situation of their loved ones, their parents and others,” said Allison. “That’s going to have a natural burden on people who are taking care of family a result of people living longer and health care costs rising.”
Only 44 percent of those surveyed believe their employer cares about their financial well-being. More than half of millennials (54 percent) said their loyalty to their employer is influenced by how much their employer cares about their financial well-being.
