New study shows better financial positions but heightened stress for Canadians

Manulife Investment Management has released the second edition of its Canada Retirement Study: Stress, Finances, Well-Being of Canadians survey, which takes the pulse of plan participants with regards to their well-being, overall financial security and retirement preparedness.

"Canadians are feeling the impacts of the pandemic, which include financial stress for so many," Brett Marchand, Head of Retirement of Manulife Investment Management, Canada, said. "Advisors and workplaces have an opportunity to help reduce Canadians' financial stress by offering support that will help increase their knowledge of investment opportunities and confidence when making financial decisions.”

According to the study, there are six core stresses affecting Canadian workers and future financial plans: 

1. Financial positions have improved, but stress has worsened: Seven in ten respondents said they’re in as good or better financial shape than when they were pre-pandemic. However, 30% of Canadian workers surveyed – more than twice as in the previous poll – reported more serious stress during the pandemic compared to before.
2. Mental health is still impacted during the pandemic: COVID-19 has had a terrible effect on employees’ mental well-being, with 36% reporting personal finance as root cause of their stress; that’s in addition to workload (34%), relationships (31%) and work-lifestyle balance (30%).
3. Financial stress is prevalent both at home and at work: 60% say they worry about personal finances at work at least once a week. Of those who worry about personal finances, almost seven in ten believe they would be at least somewhat more productive if they did not spend time worrying at work.
4. Retirement plan participants are taking better care of their finances: By reviewing their credit reports and scores, more people were able to take better control of their finances. Three in five said they will retire on time or earlier than they planned. Those with a financial wellness plan provided by their employer are more likely to say they intend to retire earlier than planned (11% vs. 4%).
5. Workers are concerned about basic needs (health care and daily expenses) in retirement, but unsure if they’re on track: Just under half of survey participants have a comprehensive financial plan for retirement, and seven in ten have at least moderate interest in listening to employer recommendations on Canada Pension Plan strategies.
6. Gender plays an important role on sentiment when it comes to financial positioning: Women are less comfortable with their debt levels (36%, vs. 46% of men) and are more concerned over basic costs such as food, transportation and retirement taxes (29% vs. 22% of men).

This year's findings are a confluence of trends that have raised awareness of the unstable nature of workers' finances. Nearly half of workers want to have security in their financial decisions and want to give their employers the opportunity to review programs that better support the well-being of their employees and the company.

The value of employer-funded retirement programs is widely recognized and 84% consider it a significant benefit to the company. Three-quarters of respondents said financial wellness programs has or would have at least some impact in reducing financial stress, having a positive impact on productivity, referrals to someone's company, or staying at their current job.

"With just under half of respondents saying they have a comprehensive financial plan for retirement and half expressing a desire to be more confident about making financial decisions, the potential impact of offering an expanded financial wellness program in the workplace is clear," Marchand added.