Employee financial stress has doubled since COVID-19 began, according to new data.
The number of individuals reporting high levels of financial stress more than doubled from 11% pre-pandemic to 27% since the crisis struck, a new survey of retirement plan participants from John Hancock Retirement finds. While only 44% of participants reported experiencing financial stress prior to the pandemic, the number grew to 67% following the outbreak. Based on new financial realities– including roughly 28% dipping into their emergency savings and 19% increasing credit card balances since the beginning of the pandemic–only one-third of survey participants feel their situations will improve in the coming year.
Overall, 35% of U.S. respondents say their current financial situation is fair or poor. When it comes to financial concerns, workers rate the state of the current economy as the top concern, followed by not having enough retirement savings. Additionally, one in four of all respondents say they worry a great deal about losing their job–an increase for U.S. respondents from 2019–likely due to the impact of the COVID-19 pandemic on the economy.
John Hancock’s research is the latest to point to the economic impact the pandemic is having on employees’ financial health. Charles Schwab recently found that COVID-19 is driving employees’ anxiety about long-term retirement savings and prompting more to believe they’ll have to retire later than originally planned. Overall, the COVID-19 pandemic is causing serious financial problems for many employees, with rampant job loss, salary cuts and retirement savings declines.
Related: How COVID is changing employees’ plans for retirement
Despite the bleak financial picture, the survey points to a silver lining–that employees are more open to financial advice than in years past and are increasingly looking to their employer for help.
Nearly three-quarters of participants report they would seek advice on retirement planning, up from two-thirds of respondents in 2019. And 75% claim that an employer-sponsored financial wellness program would positively affect their financial stress, suggesting that employers can have a direct impact on the financial wellness of their teams beyond salary. Overall, 80% of respondents report that simply setting financial goals would be at least moderately helpful.
“Employers are uniquely positioned to provide relief in many forms, including alleviating financial stress for their employees by revisiting the benefits playbook,” says Lynda Abend, chief data officer of John Hancock Retirement. “Employees are looking for advice and guidance, which employers can provide through a holistic financial wellness offering.”