Coronavirus exacerbates millennial financial anxiety
Two in five UK workers (40%) report increased worries about money in the wake of the coronavirus pandemic, but it is millennials who are the hardest hit.
The Changing Trends of Financial Wellbeing report from Close Brothers found that more than half (51%) of people aged 25 to 34 have suffered from increased anxiety around their personal finances due to Covid-19.
Before the pandemic, just under half (48%) of UK employees were happy with the state of their finances, and more than a quarter (28%) were actively unhappy with them.
These figures had changed little since Close Brothers’ 2018 Financial Wellbeing Index research, where the figures stood at 51% and 28% respectively.
The more recent report examined the impact of lockdown on overall wellbeing – mental, physical and financial health. It found UK employees are under significant strain.
Before lockdown, one in 10 employees said that they worried about their physical health daily. This is the case for almost twice as many women than men (10% v 6%).
Mental health is also a significant issue, with 8% of employees worrying about their mental health constantly, and a further 8% saying they do so on a daily basis.
But, again, it is the younger demographics that are most vulnerable, with nearly a third (31%) of those aged 18 to 24 worrying about their mental health either daily or constantly. About two in five (39%) of this younger group said they worried about financial health either daily or constantly.
Once the pandemic hit, just under half (45%) of workers worried more about their physical health compared to pre-crisis times, making it the biggest health concern increase among workers. About two in five (41%) worried about their mental health more.
A more uncertain work environment is playing a role in causing anxiety, with Close Brothers’ findings also highlighting that younger workers are highly vulnerable to income reduction.
About one in 10 workers have been forced to work reduced hours (11%), but this burden is felt much more by those earlier in their career.
Nearly a quarter (22%) of Gen Z employees, and 19% of millennials, have had their hours cut. Such a squeeze has meant that 8% of workers have seen their savings eroded, rising to 15% among millennials.
When it comes to tackling money challenges, half of workers headed to personal finance websites to find out information, with three in ten (30%) consulting their bank, or family and friends.
A slightly smaller proportion are likely look to government organisations (28%), while one in four (25%) have considered consulting an independent financial adviser. A fifth (21%) have sought guidance from their employer.
On the plus side, two in five (40%) employees have been able to make use of having more time on their hands by reviewing their finances.
Jeanette Makings, head of financial education at Close Brothers, said: “The coronavirus crisis has brought into sharp focus the importance of financial wellbeing and highlighted the far-reaching impact of financial stress across all aspects of our lives and overall wellbeing.
“While these challenges apply to all UK employees, younger workers are more affected, both in real financial terms as well as from heightened anxiety and worry. This cohort have not yet had the same amount of time to build up their financial resilience, so face the double-whammy of income cuts with a minimal financial cushion.
“It’s encouraging that people at all life stages are using the extra time provided in lockdown to get to grips with their financial situation, but we shouldn’t expect them to do it alone. Employers are one of the trusted resources people turn to for guidance and they can do a great deal to help their employees to be better prepared to meet any financial challenges head on.”