Millennials Hardest Hit as COVID-19 Impacts Consumer Finances Around the World
New TransUnion research assesses pandemic’s impact on consumer finances in seven global markets
The COVID-19 pandemic is causing similar financial challenges for consumers around the world, but new research indicates that Millennials are being challenged the most. A just-released TransUnion global report including seven regions on five continents found that 84% of South African Millennials indicated their household incomes have been negatively impacted by the pandemic, compared to the global average of 76%. This compares to 79% for all other generations in South Africa (64% globally).
In the weeks since the World Health Organization (WHO) declared the coronavirus (COVID-19) a pandemic on March 11, TransUnion has polled thousands of consumers in South Africa, Canada, Colombia, Hong Kong, India, the U.K., and the U.S. to determine the impact of the pandemic on their finances. Research for the global report was conducted in mid-April and observed how COVID-19 has impacted millions of global consumers differently based on employer size, generational differences, government interventions and income dynamics.
“COVID-19 has brought about unprecedented financial challenges to people and businesses around the globe,” said Lee Naik, CEO of TransUnion Africa. “It’s important that we all have a good understanding of the situation, because our ability to eventually recover from this global pandemic is as much about understanding the financial impacts of this crisis as the physical ones.”
A clear outcome from the research is that many consumers are worried about their finances, but the Millennial generation (ages 26-40) is under the most stress. In the seven regions featured in the study, 22% of Millennials with household incomes negatively impacted have lost their jobs 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 slightly higher than in South Africa, where 11% of Millennials report having lost their jobs and 34% have seen their work hours reduced.
Millennials Facing Greatest Challenge from COVID-19 Pandemic
This pressure is compounded by the fact that 61% of Millennials said they have dependent children living at home – a much greater rate than the 39% noted for other generations. In South Africa, 66% of Millennials in the survey have dependent children living at home, compared to 48% 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 South Africa, 47% of impacted Millennials are unable to pay for shelter, compared to 43% for other generations.
“Millennials are the first generation to be fully immersed in mass-market digitalisation and are savvy at securing credit,” said Carmen Williams, director of research and consulting at TransUnion South Africa. “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.”
Where do we go from here?
While the global report makes it clear that consumers are struggling financially, the research suggests that 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 South Africa, 75% 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. No crystal ball exists. And people living today have never faced a similar global pandemic with such a far-reaching impact,” said Williams. “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.”
Additional details about the report as well as resources for consumers looking to minimise the potential negative impact of the pandemic on their credit can be found on TransUnion’s COVID-19 website. Businesses interested in learning how to navigate the impacts of COVID-19 can gain insights from TransUnion webinars, blogs and more here.