Manulife study shows 40% of Canadians are ‘financially unwell’

Study shows that that only 1% of the financially unwell save on a regular basis

Manulife study shows 40% of Canadians are ‘financially unwell’
New research from Manulife shows that while Canadians’ personal finances are improving, there are a significant amount of people that are feeling stressed over dollars and cents. The Manulife Financial Wellness Index showed that 34% of respondents felt financially well, compared to 28% in 2015, but that stands against 40% who said the complete opposite. Being financially unwell has a number of implications, not only for individuals, but their families and employers too.

Of those deemed financially unwell, 82% were found to be concerned by debt, while 60% worry about saving for retirement. In addition, 83% said they are not financially prepared to protect their loved ones in the event of death or serious illness.

The index is now in its second year, and is an ongoing project for Manulife to track Canadians' financial wellness. Sue Reibel, executive vice-president and general manager Institutional Markets at Manulife, explains the reasoning behind this study.

“Your financial wellness is your overall financial situation,” she says. “It includes budgeting, whether you are saving and have some sort of a retirement plan. Also, how you manage your debt, and do you have a will or insurance to protect your family if something were to happen to you?”

For the 40% classified as financially unwell, a common trend was apparent when it came to their overall health. Only 51% said they are in good physical health, with only 45% of them exercising and 64% saying they eat fruit and vegetables. It’s clear that when paying your bills is the main concern, your own physical wellbeing often takes a backseat. This is particularly impactful when it comes to mental health, as Reibel explains.

 “We know that over a third of our disability claims in our group benefits business are related to mental illness,” she says. “You wouldn’t link a muscle injury to financial stress, but you definitely see a strong linkage to absenteeism from work and mental illness.”

When it comes to the workplace, the index revealed that 49% of the financially unwell say they feel distracted at work due to money-related issues. Most damning of all the statistics included in the index is the revelation that only 1% of the financially unwell save on a regular basis and are on track to reach their retirement goals. This has ramifications for employers too, which is why Reibel advises companies to offer assistance to their workers before these issues become real problems.

“Our assessment doesn’t just give an index score; it gives an action plan,” she says. “It gives you the things you need to work on to improve your financial wellness. Some are easy like making a will, which you can do online now. Others are harder, like preparing a budget and following it through. We are also aligning additional support behind it through employers, whether it is access to an advisor, or access to online tools.”

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