The gap in financial health between generations is growing as Generation Y employees — those currently between the ages of 21 to 32 — are struggling more with debt and cash management issues, while Baby Boomer and Generation X employees’ financial wellbeing has improved in the past twelve months, according to the 2014 Employee Financial Wellness Survey by PricewaterhouseCoopers US.
Gen Y, or millennials, was the only generation to see an uptick in the percentage of employees who consistently carry balances on their credit cards, up 14 percentage points year-over-year to 51 percent. More Gen Y employees also reported difficulty meeting their household expenses on time each month — up 11 percentage points to 41 percent from last year; again, the only generation not to see an improvement.
“While last year our results showed that Gen X carried the heaviest financial burden as they were pulled between obligations to their parents, children and their own retirement, their financial health, along with that of baby boomers, appears to be recovering faster than Gen Y employees,” says Kent Allison, Partner and National Practice Leader of PwC’s Employee Financial Education practice. “Baby boomers and Gen X have savings stored away and many still have some equity in their homes, so they’ve benefitted from the stock market rally and an increase in home values in most markets in the US.
Millennials are more dependent on their incomes, and we’ve seen that the labor and wage markets haven’t improved as quickly as the equity markets. Disparity in financial health between the generations will likely continue to grow until we see an increase in wages that is greater than the increase in living expenses.”