According to a survey of more than 1,100 U.S.-based respondents interested in flexible work, more than half (53%) of people are currently earning half or less of their pre-pandemic income. Approximately one-third (31%) of respondents have lost their entire income since the pandemic started. This survey was conducted by FlexJobs, fielded in partnership with Prudential (1), in late June 2020.
Almost half (46%) say their emergency savings wouldn’t last them more than three months and roughly a quarter (24%) said their savings would not even last one month. Overall, 62% of those surveyed do not have enough emergency savings to last six months.
Lack of Financial Wellness:
As a result of the pandemic, many have experienced a significant shift in their financial stability:
- 44% of respondents reported that they are currently struggling financially, whereas only 24% reported the same thing before the pandemic
- 21% said they were financially secure before COVID-19, and only 10% say the same thing now.
Immediate Financial Steps Taken:
84% of respondents are taking specific steps regarding their finances, many of which may have a negative long-term impact on their financial health, especially on their retirement planning. Collectively, 1 in 5 respondents made changes to their retirement savings, including stopping or reducing retirement contributions (12%) or withdrawing from their retirement savings (8%).
Other actions that people have taken or plan to take in the next three to six months to address their financial situation as a result of COVID-19 are:
- Try to pick-up extra work/hours, looking for sources of additional income (49%)
- Build my emergency savings (28%)
- File for unemployment (28%)
- Delay a major purchase, such as a car (25%)
- Use my emergency savings (23%)
“At FlexJobs, we are deeply aware of how intricately jobs and finances are intertwined, which is why we have partnered with Prudential to gain a better understanding of the challenges that many people are now facing,” said Sara Sutton, Founder and CEO of FlexJobs. “We also co-hosted a financial wellness educational webinar to help educate workers about financial steps they can take during the pandemic and beyond. For the longer term, we established a financial wellness resource center to support their growing financial literacy and ultimately help them reach their financial goals,” Sutton concluded.
The pandemic has only exacerbated tenuous financial conditions for many in the flexible workforce.
- Just 30% agreed that they had a good plan in place in case they got sick or needed care in the short-term, and even fewer strongly agreed (12%).
- Although over two-thirds say personal financial wellness is a key priority, only 50% agreed that they felt prepared to make informed decisions about their finances. When asked what’s keeping them back from feeling well-prepared, respondents cited the following obstacles:
— Don’t know how to evaluate the different options (27%)
— Don’t know what options are even available to them (23%)
— Didn’t have strong role models when it comes to finances (23%)
— Don’t understand the financial terms/jargon used (21%)
— Not earning enough money (44%), high cost of living expenses (35%) and
too much debt (26%) were the top reported reasons for not meeting
financial goals before COVID-19.
- Other factors preventing people from reaching their financial goals included not being disciplined enough about finances (23%), not having enough time to focus on financial goals (16%), and not having access to workplace benefits (e.g., health/dental/vision insurance, paid time off, disability insurance) (15%).
“The pandemic exposed the widening gap between the financially secure and insecure in this country – with people of color, women, younger generations, gig workers, and the retail workforce disproportionately impacted,” said Dawn Goldbacher, Vice President of Business Development at Prudential. “Access to protection, savings, education, and employment opportunities through the workplace and other channels are essential to recovery.”
For the full report of the survey, conducted in June 2020, please visit https://www.flexjobs.com/blog/post/flexjobs-prudential-survey-covid-19-personal-finances/ or contact Kathy Gardner at firstname.lastname@example.org for more information.