John Hancock Retirement, a company of Manulife Investment Management, announced the results of its seventh annual financial stress survey of retirement plan participants, revealing the weight of financial stress on workers and its impact on employers. The survey shows that while financial stress has increased overall this past year, the pressure and uncertainty of the COVID-19 crisis has caused workers to prioritize financial wellness and seek guidance for both short and long-term financial planning. The 2020 financial stress survey was expanded to include respondents in both the United States and Canada and captures similar sentiment across the two countries.
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“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, 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. Further, while only 44% of participants reported experiencing financial stress prior to the pandemic, the number grew to 67% following the outbreak. Based on today’s realities, including roughly 28% dipping into their emergency savings and 19% increasing credit card balances since the beginning of the pandemic, only one-third of survey participants feel their situations will improve in the coming year.
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Simultaneously, the survey results reveal an increased interest in receiving advice from professionals both on retirement saving and investing, particularly among U.S. respondents compared with prior years. Nearly three-quarters of U.S. participants 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 that they would seek it out in 2020 versus 50% in 2019. In Canada, more than half of the respondents indicated they were interested in retirement planning and investing advice, at 58% and 51% respectively.
“This year has delivered many challenges and both employers and employees have been asked to reimagine how they work,” added Lynda Abend, chief data officer, John Hancock Retirement. “Employers are uniquely positioned to provide relief in many forms, including alleviating financial stress for their employees by revisiting the benefits playbook. Employees are looking for advice and guidance, which employers can provide through a holistic financial wellness offering.”