There has seen a generational shift in who is doing better financially, according to a recent PwC survey. Millennials, also known as Generation Y and representing people ages 21 to 31—are carrying higher balances on credit cards and having a hard time paying their money bills. Meanwhile, Generation X and the Baby Boomers are gaining in financial health.
This is a different picture from the same survey last year, which showed that Generation X—people in their 30s, 40s and 50s—was struggling the most out of all demographics. Although the pressures of being responsible to both aging parents and growing children still weigh heavily on that generation, improvement in the stock market and a better housing market have benefitted them. Since many Millennials do not yet own homes and are more income dependent than both Generation X and Baby Boomers, the rebounding economy has not necessarily affected them the same way.
“The labor and wage markets haven’t improved as quickly as the equity markets. Disparity in financial health between the generations will likely continue to grow until we see an increase in wages that is greater than the increase in living expenses,” explained Kent Allison, a partner in PwC’s Employee Financial Education division.
Credit card balances up, ability to pay bills down for Millennials
Millennials are relying on their credit cards more this year than last, with 51% reporting that they consistently carry a balance on their credit cards. That’s up 14% over last year. And 41% said it is difficult for them to pay their household bills on time each month, 11% more than in 2013.
In both these areas, Millennials were the only generation to see a downturn from last year.
Generation X, Baby Boomers have their own worries
Although younger folks struggle to pay the bills and free themselves of credit card debt, the older generations have their own worries—namely, healthcare, retirement and long-term financial security. Only 48% of Baby Boomers feel that they will be able to handle their medical costs after they retire.
The Affordable Care Act (ACA), or Obamacare, is not easing the worries for many. Fifty-nine percent of employees across all demographics believed the ACA will increase health care costs, and 61% said their employer has not taken action to help them understand how the ACA will impact them.
Baby Boomers saw a rise in confidence about retirement with 48% feel confident about affording retirement this year compared with 37% last year. Seventy-seven percent of all respondents said they’d prefer a retirement plan that gives them fixed monthly payments instead of one lump sum that they have to invest on their own.
Stress across all ages
When asked whether they suffer from general financial anxiety, 60% of Millennials reported that they do. Generation X was right behind them at 53%, and Baby Boomers felt the least stressed at 36%.
The Employee Financial Wellness Survey is sponsored annually by PwC and tracks views from more than 2,100 adults with full-time jobs.