Manulife Investment Management announced the results of its Financial Stress Survey of Canadians, revealing the weight financial stress is having on workers and its impact on employers. The survey shows financial stress has increased this year and the pressure and uncertainty of the COVID-19 crisis has compelled people like never before to seek guidance on financial planning. The 2020 survey includes respondents in both Canada and the United States and captures similar sentiment across the two countries.
"Given the upheaval experienced in 2020 to-date, it's no surprise that retirement savers are more stressed today than they were pre-COVID," said Sue Reibel (photo), Global Head of Retirement, Manulife Investment Management. "The silver lining in this year's data is that people are more open to financial advice than in years past. In this environment, when faced with managing multiple pressures, stress is high and responsibilities are piling up, and retirement investors are looking for a trusted source of advice when it comes to navigating their finances."
The pandemic's impact on financial stress is evident and significant. In fact, the number of individuals reporting high levels of financial stress more than doubled from 11% pre-COVID to 27% since the crisis struck. Based on today's realities, including roughly 51% of Canadians dipping into their emergency savings or increasing credit card balances since the beginning of the pandemic, only one-third of survey respondents feel their situations will improve in the coming year. Further, while only 44% of respondents reported experiencing financial stress prior to the pandemic, the number grew to 67% following the outbreak.
Simultaneously, the survey results reveal an increased interest in receiving advice from professionals both on retirement saving and investing. In Canada, more than half of the respondents indicated they were interested in retirement planning and investing advice. Nearly three-quarters of U.S. respondents reported that they would seek advice on retirement planning, up from two-thirds of respondents in 2019. When it comes to investment advice, 63% responded they would seek it out in 2020 versus 50% in 2019.
"This year has challenged employers and employees alike to do business and work in novel ways," added Brett Marchand, Head of Canada Retirement, Manulife Investment Management. "Employers are in a unique position to support their employees, including alleviating financial stress and offering advice and guidance, which employers can provide through a holistic financial wellness offering."
Opportunity for Employers
With survey respondents reporting increased interest in advice and 75% claiming that an employer-sponsored financial wellness program would positively impact their financial stress, the data suggests 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 helpful.
Ninety per cent of respondents feel it is important for employers to offer financial wellness programs, including roughly four in ten who find them highly important. Thirty per cent of Canadian respondents claim their employers offer a fairly or very extensive financial wellness program and just 12% of U.S. respondents report the same experience. Nearly one in five Canadian respondents to say they are unsure of whether or not their employer offers a program at all.
Additional noteworthy data from the 2020 Financial Stress Survey include:
• Personal finances and economy: Three-in-ten Canadian respondents say their overall current financial situation is fair or poor. More than a third (35%) of U.S. respondents agree. 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. One in four of all respondents say they worry a great a deal about losing their job – an increase for U.S. respondents from 2019, which could be due to the impact of the COVID-19 pandemic on the economy.
• Employees are more focused on their progress. Despite consumers' increased worries about their current and future financial positions, they are more in tune with their financial needs than ever before. More than two-thirds of respondents visit their retirement plans at least once a quarter to monitor their finances, including roughly four in 10 (39%) who visit their plans once a month.
• Employees are looking for personalized retirement projections: Eighty-nine per cent of Canadian respondents and 95% of U.S. respondents said that projections of estimated income and expenses in retirement, including healthcare expenses, would motivate them to prepare for retirement.
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