June 15, 2021
New study by Aviva finds 24% of employees made bad debt decisions during the Covid-19 pandemic. Research also indicates that certain personality types are predisposed to debt struggles.
Nearly a quarter (24%) of employees admit they made a bad decision about debt during the pandemic. The study was conducted by Aviva, in collaboration with Business Wellbeing Specialists Robertson Cooper, and examined experiences of personal, workplace and financial wellbeing since early 2020.
In addition, more than half (51%) of the 24% were aged 18-to-24, dubbed ‘Gen-Z’. Amid the turmoil of the pandemic, young people have emerged as one of the most vulnerable, and hardest hit, groups in society.
Aviva’s report – Thriving in the Age of Ambiguity: building resilience for the new realities of work – reveals how our relationship with finances, work and our hopes for the future have evolved as we adapt to the ambiguity from the last 12 to 18 months.
Worryingly, the research shows that 39% of employees agree their current financial situation negatively impacts their mental health, while 60% feel their finances control their lives.
However, those suffering from poor financial wellbeing do not necessarily think of themselves as bad with money – challenging the stereotype that money worries arise from disorganisation or knowledge gaps.
68% of employees with poor financial wellbeing think they are organised with their money, and 64% always try to minimise debt. The research shows financial factors only account for half (51%) of someone’s sense of financial wellbeing; the rest is driven by other factors, including personality type.
The influence of personality
Aviva’s study shows personality type has a huge influence on individual behaviour, mindset, and personal outcomes. Employees who are thriving in adversity tend to be naturally more emotionally resilient and optimistic. Those with less natural emotional resilience regularly experience negative emotions, low financial and mental wellbeing, along with feelings of anxiety and struggle with debt.
However, employees of all types need personalised support. By accounting for diverse personalities in the modern workforce, Aviva argues UK businesses can better understand the likely impact when people are put in different situations or asked to make certain decisions to help them perform to their potential.
Laura Stewart-Smith, Head of Workplace Savings and Retirement at Aviva comments: “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.
“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.”
Iona Bain, personal finance expert, adds: “As we gradually move out of lockdowns and restrictions, employers and employees alike will need time, support, and expert insight to skilfully navigate this brave new world. Sadly, there appears to be a mismatch between good intentions and reality. Aviva’s report shows businesses aren’t always grasping even the basic needs of their workforce, but with tailored support for employees based on their personality and life situation, fostering a top-down culture of genuine choice, and giving employees clarity and direction, there is hope that this might be reversed.”
Story originally appeared on fca.org.uk