Generational Financial Health Gap Widens as Millennials Struggle with Debt, Cash Issues, According to PwC Study
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"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
Healthcare Cost Remain a Top Concern
Healthcare continues to be a significant concern with most employees (81 percent) saying they believe that healthcare costs will rise over the next several years, and less than half of all Baby Boomers (48 percent) confident they'll be able to cover their medical expenses in retirement. Thirty-three percent of employees cited healthcare costs as one of their biggest concerns about retirement, but fewer employees cited the fear of losing healthcare coverage as a reason to delay retirement, down 5 percentage points this year from 29 percent last year.
There is a common perception among employees that the Affordable Care Act (ACA) will increase health insurance costs, as reported by more than half of employees (59 percent). While the vast majority of employees (85 percent) say they are familiar with the ACA, less than one in five (19 percent) have looked into using a health care program from a marketplace or exchange. Most employees (61 percent) say their employer has not provided any tools or resources to help them understand the effects of the ACA on their financial health and less than a third (30 percent) say their employer has provided educational pamphlets and materials. As more employers consider exchanges, it will likely require additional communication and education to alleviate confusion.
Retirement Confidence Up, but Employees Long for Security
Retirement confidence for employees overall rose 5 percentage points this year to 40 percent, with the largest jump in confidence coming from Baby Boomers (48 percent, up from 37 percent). While
"It is likely that a long and sustained economic recovery alone will not reverse the growing retirement savings deficiency for most employees," says Allison. "Planning and saving for long-term security is critical. Employers have an important role to play and need to continue their efforts to help employees become better savers and lead more financially healthy lives."
Financial Stress Continues to Distract Employees
Given the state of their financial health, it shouldn't be surprising that significantly more Millennial employees (60 percent) report financial anxiety than Baby Boomers (36 percent) and Gen X (53 percent). Although overall employee financial stress across generations dropped to its lowest level in three years to 48 percent from 61 percent in 2012, financial burdens continue to impact employee productivity.
Twenty-four percent of US employees admit that personal finances have been a distraction at work. Of those, 39 percent say they spend three hours or more at work each week thinking about or dealing with issues related to their personal finances. This is particularly true for Gen Y employees where 35 percent admit that personal financial issues have been a distraction at work, up 16 percentage points from 2013.
"Financial stress has a significant impact on both employees and employers. Increased stress can affect morale, health and ultimately an employer's bottom line," says Allison. "At PwC, we work with our clients to ensure that they can take a more proactive and holistic approach to improving financial wellness among their workforce– one that accounts for key generational differences."
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SOURCE PwC US
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