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6 min read

Gen Z to Baby Boomers: how financial stress affects generations differently

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Many organisations are creating new programmes and policies to support their employees’ financial wellbeing. But how are different generations of employees coping amidst heightened financial stress?

And how can you ensure you help every employee, across every key life stage?

In autumn 2022, Claro Wellbeing conducted a nationally-representative survey of 1,300 UK workers to dig deeper into these questions. We used the following generational classifications to make splits in our data, before asking questions around wellbeing, stress, money and work: 

  • Generation Z (people aged 18 – 25; hereafter “Gen Z”)
  • Millennials (aged 26 – 41)
  • Generation X (aged 42 – 57; hereafter "Gen X") 
  • Baby Boomers (aged 58 – 65)

Some key findings:

  • Younger generations are more likely to say money worries affect their performance at work
  • Money worries cause low productivity universally across every generation
  • How different employees feel about their finances remains, sadly, unsettling across every generational group

In this article, we'll explore these findings in more detail, and uncover what HR, rewards and benefits teams can learn from them to inform their financial wellbeing strategies.


How are different generations currently experiencing financial stress?

1. The younger you are, the more likely you are to say money worries affect your work performance

We asked workers if they feel their money worries affect their work performance.

On average, two-thirds (67%) of employees said they feel money worries affect their work. 

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But splitting the data by generation reveals that younger generations are the most likely to say money worries affect their work performance. 

Almost one in five (18%) of Gen Z said they feel money worries affect their work performance “all the time” – almost double the average of 11.8%. Meanwhile, just 3% of Baby Boomers said this applied to them.

Similarly, younger generations were more likely to say they worry “often” or “sometimes” than older generations. 

For example, 25% of Gen Z respondents and 22% of Millennials said their money worries affect work performance “often”, compared with 11% of Gen X respondents and 7% of Baby Boomers. 

Gen Z and Millennial employees are each approximately two times as likely as Gen X employees to say money worries often affect their work performance – and three times as likely as Baby Boomers.

Strikingly, 59% of Baby Boomers say money worries never affect their work performance – almost double the average of 33%. The same is true for 43% of Gen X employees, but just 23% of Millennials and 14% of Gen Z.


2. When they worry about money, all generations are less productive — but there's more to it

In our survey, we also looked at the ways in which money worries affect work performance for different generations.

The most likely effect of money worries, regardless of your generation, is to be less productive.


Meanwhile, the data also suggest that many employees were likely to feel undervalued in their role, with some 14% of Gen Z, 26% of Millennials, 23% of Gen X and 10% of Baby Boomers admitting money worries result in them looking for a higher-paying job, while at work.

Younger generations are the most likely to take sick days as a result of financial stress. More than one in four (27%) of Gen Z respondents said they would take more sick days. The same is true for 17% of Millennials, 16% of Gen X, and 5% of Baby Boomers.

This is significant insight for organisations when considering how to strategically reduce the average three-and-a-half days lost per employee per year due to time spent on finances while at work.


3. Employees of every generation are more likely to be concerned than they are happy. But Gen Z are five times more likely than Baby Boomers to feel "unhappy, not in control" with their money

The data so far suggests that younger generations have it worse when it comes to financial stress. 

But the next graph reveals why, when building your financial wellbeing programme, it’s important that you don’t jump to conclusions.

The overall picture of how different employees feel about their finances remains, sadly, unsettling across every generational group.

While our data suggest 38% of Baby Boomers are likely to feel “in control and happy”, Baby Boomers are also the most likely to be “concerned”, with almost half (46%) saying so. 

Some 38% of Gen Z feel either “not in control, unhappy”, “stressed”, or “overwhelmed”. The same is true for 33% of Millennials, 29% of Gen X and 16% of Baby Boomers. 

While this may be the case for members of some generations more than others, employees in every generation are struggling.


4. The biggest sources of stress differ by generation – but members of all four generations are experiencing all eleven sources of financial stress to some degree

Bearing in mind our survey was of 1,300 people, there are some useful insights to take away from our data set around sources of financial stress.

The greatest cross-generational source of financial stress was managing finances amid the cost of living crisis. While the most polarising stresses included budgeting and difficulty buying a house, both of which were more of a worry for younger generations.

Sadly, a significant percentage of each generation is struggling with debt, and 35% of them are Millennials.

Additionally, very few of those stressed about planning for retirement were Gen Z or Millennials, which could highlight a need for education around pension plans.


How should this inform your financial wellbeing initiatives?

As we've seen, the four generations are experiencing financial stress in different ways, to different degrees, for different reasons.

This leaves questions for HR, rewards and benefits leaders to grapple with when devising financial wellbeing strategies.

Here are our insights.


1. Deliver immediate relief to those struggling

How can a financial wellbeing programme deliver immediate relief to those struggling the most? 

There are two main ways we recommend. 

A) Consider salary increases and hardship loans

Topping up an employee’s salary or offering a loan so that they can access their money early is sometimes the best course of action. 

B) Provide Financial First Aid

If a salary increase or hardship loan is not possible, consider other ways you can provide a helping hand. 

Some employees may need an extra helping hand to discover help and resources. One way to facilitate this would be through having Financial First Aiders throughout your organisation – employees trained to lend a listening ear to financially-stressed employees, while guiding them to the best resource for their situation. 

For example, if an employee is struggling to manage day-to-day money, they may value access to a budgeting tool to gain a new perspective on their spending behaviour. If an employee is struggling with debt, a Financial First Aider can signpost them to credible debt charities and confidential support. 

You should also consider these points when selecting your financial wellbeing provider to ensure that a range of resources and tools are available.


2. Work with your employees to find out what will help them 

We also asked what kinds of support each respondent would value most. 

The most popular type of financial wellbeing benefit for Baby Boomers was one-to-one financial coaching, with 46% of them choosing this response. 

Webinars tended to be more popular among younger generations, with 39% of Gen Z saying so compared to 21% of Baby Boomers.

But asking your employees the same questions as we asked our respondents may well produce different results.

It's important to work with your people directly, through direct engagement, to figure out the best ways to help them. What are their biggest sources of financial stress? How would they prefer to resolve these stresses?

This is an iterative process. Creating communication channels to discover what kind of support your people need will, eventually, break down the taboo around money. 

It’ll also build trust and make it easier for you to observe trends in your people’s personal finances, so that you can help them better.


3. Support all life stages

How can organisations ensure they provide adequate help for every employee, at each key life stage?

Some of people's biggest life goals also involve giant financial commitments or obstacles.

Many employees have similar goals that revolve around different life events or stages: for example, needing to create an emergency fund, reaching the time to buy their first home, needing to save up for a wedding, starting to provide for their family and getting ready for retirement.

Giving support tailored around life stages is effective because they are underpinned by specific goals.

It’s important that organisations also understand how closely tied these goals can be to an employee’s wellbeing, and can offer every employee different methods of making progress.

For example, not having an emergency fund leaves many of us feeling overexposed to risk and on edge. Not being able to save up for a house leaves many of us feeling dejected. When we can't work towards our goals, our wellbeing suffers.

While saving towards goals might be a breeze for some, we’re not all given the same financial education growing up. In fact, financial literacy levels vary massively in the UK.


4. Double down on education

Just as with physical and mental health, prevention is better than cure. And the best way to prevent poor financial health is through education. It means you can help your employees discover and build good (financial) habits, while becoming conscious of bad ones.

Education can also take many forms – from one-to-one guidance, to self-learn personal finance courses, to interactive webinars and workshops. 


5. Always be inclusive

How can financial wellbeing programmes be designed such that they are inclusive?

The best way is to offer the same level of support to everyone and empower them to choose how they want to improve their financial health. 

Each generation tends to have a different level of knowledge and confidence around money. And it’s important to understand that financial wellbeing is made up of two components: financial know-how and mindset.

Indeed, sometimes confidence with money can come with experience/mindset skills, and help people overcome temporary turbulence in their finances. But that does not mean that you should offer different types of support to different generations. As our data has shown, all four generations are experiencing all eleven sources of financial stress to some degree.

Wrapping up, then:

  • Younger generations are more likely to say money worries affect their performance
  • Money worries cause low productivity universally across every generation
  • How different employees feel about their finances remains, sadly, unsettling across every generational group

Organisations should:

  • Deliver immediate relief to those struggling
  • Work with employees to find out what will help them 
  • Support all life stages
  • Double down on education
  • Always be inclusive



More data, better decisions

The workplace today report

If you found this article valuable, get a copy of our report The Workplace Today to delve into more detail about how money worries affect productivity, performance and more.

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