Covid-19 debt upsets workers’ finances
The pandemic forced nearly a quarter of workers into a bad decision about debt, a study reveals.
The study from Aviva paints a grim picture of the nation’s financial health which plummeted during the pandemic with those aged 18 to 24, dubbed ‘Gen-Z’ hit the hardest.
Insurance company Aviva conducted the study which looked at how people’s relationship with finances evolved during the Covid pandemic.
More than a quarter (24%) of respondents said they had made bad decisions about debt over the past 12 months with this figure rising to more than half (51%) among those aged 18 to 24.
Almost a third (29%) had to borrow cash and one in 10 opted to defer their mortgage or personal debt repayments.
More than a third (36%) of Gen-Y aged 25-to-39 also feel they made a bad debt decision since Covid-19 struck.
The research also shows 39% of employees agree their current financial situation negatively impacts their mental health, while 60% feel their finances control their lives.
More than a quarter (29%) of respondents disclosed they have had to borrow to replace lost income, while 30% stated they are concerned their money will run out.
Aviva head of workplace savings and retirement Laura Stewart-Smith said: “The Covid-19 experience has fundamentally altered our relationship with money, work and health. While some employees have been able to boost their financial wellbeing by saving more, with large swathes of the economy closed, others have found their income reduced and are facing larger debts or having to provide support for dependent family members.
“Our report shows many trends which have been gathering pace in recent years have now reached an inflection point, as new preferences emerge to shape the way we work, feel, think and plan ahead. Financial education in the workplace is nothing new, but now more than ever, there is a fundamental need for employers to provide tailored support for employees to ensure they can genuinely thrive.”
She added: “Financial confidence can have a tremendous impact on mental health and personality type has a huge influence on behaviour and mindset too. Greater support is vital for employees to thrive in an increasingly ambiguous financial environment. We believe there is a crucial role that employers can play in facilitating this. One which introduces a new dimension of personality type.”