TransUnion: Coronavirus Giving Millennials Toughest Financial Challenges
The COVID-19 pandemic is causing similar financial hardship for consumers around the world, but new research from TransUnion, Chicago, shows Millennials are being challenged the most.
The TransUnion report including seven regions on five continents found that three in four Millennials (76%) worldwide (those persons between the ages 26-40) indicated their household incomes have been negatively impacted by the pandemic. This compares to 64% for all other generations.
“COVID-19 has brought about unprecedented financial challenges to people and businesses around the globe,” said Chris Cartwright, CEO of TransUnion. “A thorough and fact-based understanding of these impacts and how best to respond to them is second only to our health and safety in terms of society’s successful recovery from this global pandemic.”
The report said many consumers are worried about their finances, but the Millennial generation is under the most stress. In the seven regions featured in the study, 22% of Millennials with household incomes negatively impacted have lost their job due to COVID-19, compared to 16% for all other generations. Just under half (45%) of Millennials with incomes negatively impacted have seen their work hours reduced compared to 35% for the rest of the group. Impacts observed globally are similar in the U.S.
Compounding this is 61% of Millennials reporting they have dependent children living at home – a much greater rate than the 39% noted for other generations. In the U.S., 58% of Millennials in the survey have dependent children living at home compared to 36% for other generations.
Millennials who have seen their household incomes negatively impacted also are having more pronounced problems with certain debt obligations. For instance, 63% with negatively impacted incomes report they will not be able to make their rent or mortgage payment compared to 54% for other generations. In the U.S., 61% of impacted Millennials are unable to pay for shelter compared to 57% for other generations.
“Millennials are the first generation to be fully immersed in mass-market digitalization and are savvy at securing credit,” said Charlie Wise, head of global research and consulting at TransUnion. “While Gen Z can say the same, the big difference is that many Millennials are more settled in their careers and are beginning to approach the peak earning period of their lives.”
However, he report said while consumers are struggling financially, they are coping relatively well. For instance, five in six (85%) global respondents said they have a plan to deal with their financial gap regardless of generation. In the U.S., 87% said they have a plan.
“The big question most everyone is asking is how long the pandemic will last and what will be the impact on the global economy,” Wise said. “No crystal ball exists. And people living today have never faced a similar global pandemic with such a far-reaching impact. The good news is the research demonstrates that people are resilient, and most have figured out a plan for how they will manage their finances until economies re-open and employment opportunities return.”
TransUnion surveyed 9,215 consumers in the U.S., Canada, Colombia, Hong Kong, India, South Africa and the U.K during the week of April 13 In addition to generational information, the global report provides insight on the impact of the financial hardship caused by the COVID-19 pandemic on other key factors such as employer size, income dynamics and government interventions.
