In a finding that may speak to some of the issues roiling this year’s presidential primary season, PwC reported Tuesday that key indicators of employee financial wellness have slid downward for the first time this decade.
Fifty-two percent of employed adults in a new survey told researchers they were stressed about their finances, and 45% said their stress had gone up over the past 12 months.
Sixty-four percent of millennials reported increased stress levels, compared with 56% of their Gen X counterparts and 40% of baby boomers. For all groups, these levels were higher than in 2015, and for millennials they were 12 percentage points higher.
“A combination of factors are adding to stress levels,” Kent Allison, head of PwC’s employee financial education and wellness practice, said in a statement.
Allison noted that salaries were barely keeping pace with the rise in cost of living, despite lower energy prices, causing an additional strain on employee budgets that were already stretched thin.
“The housing market has only moderately improved and in many places home values still remain far below prerecession prices despite interest rates being at historic lows,” he said. “Couple that with the recent volatility in the stock market, and it is no wonder employee confidence is waning.”
This year’s poll incorporated the views of 1,600 full-time employed adults representative of the U.S. population by age and gender.
Haunted by Student Loans
Millennials have become the biggest component of the U.S. labor force; they are also in worse shape than their older counterparts when it comes to their personal finances, the survey found. Forty-six percent reported difficulty in meeting monthly expenses on time, up from 35% last year.
Forty-two percent of millennial employees said they had a student loan, and 79% said that their loan had a moderate or significant effect on their ability to meet their other financial goals.
PwC said concern about student debt may have more ramifications for financial well-being than anyone thought. Consider differences among those constrained by student debt and all other employees:
- 81% reported stress, compared with 46% of all other employees
- 65% had trouble meeting household expenses, compared with 35%
- 41% needed to use credit cards to pay monthly expenses, compared with 22%
- 50% were distracted at work because of their finances, compared with 23%
- 57% raided their retirement funds, compared with 40%
Financial Wellness and Retirement
Employee retirement savings were another area of concern for employers. PwC data showed that 47% of all workers had saved less than $50,000 for retirement, and 28% were saving less for retirement than in 2015.
Not surprisingly, the poll found that more workers were postponing retirement. Forty-four percent of all employees said they would retire later than they had originally planned, up from 36% who said this last year.
Only 44% of those surveyed felt that their employer cared about their financial well-being. However, 54% of millennials said their loyalty to their employer was influenced by how much their employer cared, compared with 44% of Gen Xers and 36% of boomers.
Seventy-seven percent of millennials and 73% of Gen Xers said they would be attracted to another company that showed more care about their financial well-being. Fifty-five percent of boomers agreed.
“With retirement savings worryingly low, now is the time for employers to put effective financial wellness programs into place that focus holistically on the financial well-being of employees and drive behavioral change,” Allison said.
— Check out Repaying College Loans Early: Bad for Retirement? on ThinkAdvisor.