Financial stress on the rise as cost-of-living crisis takes its toll
The insurer’s Age of Ambiguity report suggests that feelings of anxiety are leading people, especially younger generations, to avoid looking at their finances at all. It said that 60% of Generation Z and millennials (aged 18 to 41) adopt this approach because they feel their finances are out of their control.
The findings come from Mastering the Age of Ambiguity, the fourth edition of Aviva’s series of Age of Ambiguity studies, which has been tracking employees’ changing experiences of the modern workplace since early 2020.
Aviva found that one in four (27%) employees in the UK’s largest businesses feel very anxious from day to day and that there are significant generational differences in how people feel about their finances.
Researchers found that across businesses of all sizes, Generation Z and millennials report the highest level of financial anxiety (69% and 73% respectively) leading to people avoiding looking at money matters out of fear of what they will find. This is considerably higher than older cohorts, with around half of Generation X (aged 42 to 57) feeling anxious when dealing with their finances and just over a third (36%) of baby boomers feeling the same.
The study also found that many parents and grandparents now worry about their younger family members as well as themselves. Nearly half (49%) of working parents say their top concern is their children’s financial future.
‘Engaging now is best course of action’
Emma Douglas, Aviva’s director of workplace savings and retirement said: “It is a difficult time for many, with some demographics feeling the cost-of-living crisis more acutely than others. Our research has shown that younger workers are most likely to be avoiding engaging with their finances due to feelings of anxiety and a lack of financial resilience. However, despite it being a daunting prospect, engaging now is the best course of action.
“As most people’s primary source of income, the workplace is a key environment to support an employee’s financial journey and employers can often be looked to as a trusted source of guidance on financial matters. At the same time, it’s abundantly clear that businesses and individuals are under considerable pressure in the current climate.
“It’s vital we find ways to share learnings and collaborate across the business community to make tools and support more widely available to UK employees, so that – wherever possible – companies have the ability to offer or signpost people towards financial education seminars and online tools; encourage regular financial check-ins; promote useful resources via existing employee benefits and assistance programmes; or even offer access to financial and debt advice, to help employees to navigate their current financial pressures.”