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Americans face myriad challenges due to the coronavirus pandemic. In addition to the obvious health risks, many Americans have experienced significant financial repercussions from the economic downturn as a result of the pandemic.

According to LIMRA research, 14% of consumers say they have lost their job due to COVID-19 and 32% are earning less because their hours or pay were reduced. Almost half (45%) of workers indicate the pandemic’s economic downturn has negatively affected their retirement savings and 56% are worried about the long-term impact the pandemic will have on their financial security.

The pandemic, however, is just exacerbating a problem that already existed. Almost 1 in 4 Americans have no money set aside for emergencies and another 26% have less than three months of emergency savings. Over the past several years — well before the pandemic — 4 in 10 Americans have expressed concern about paying their monthly bills and nearly 6 in 10 worried about being able to save for emergencies.

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Emergency savings represent the first line of defense for households experiencing a financial shock such as major unexpected expenses or the loss of a job. All of our data suggest that Americans could use some help.

Employer Interest in Offering Emergency Saving Vehicles on the Rise
The pandemic has prompted more companies to express interest in offering financial wellness support and taking specific action to offer emergency savings resources. Nearly two-thirds of employers are somewhat or very interested in offering employees access to an emergency savings account. Also, 3 in 10 defined contribution (DC) plan advisors would like to see recordkeepers offer workplace emergency savings alongside retirement plan recordkeeping.

There are a few different approaches to the emergency savings gap:

One thing is certain; COVID-19 has highlighted how precarious life can be. It also underscored the need to help Americans prepare financially for the unexpected. The good news is LIMRA research finds more than 6 in 10 workers are interested in a workplace emergency savings account. Innovation in this area can help create more stability today and a more certain tomorrow for employers, their employees, and families across America.

Media Contacts

Catherine Theroux

Director, Public Relations

Work Phone: (860) 285-7787

Mobile Phone: (703) 447-3257

ctheroux@limra.com

Brooke Lacey

Public Relations Specialist

Work Phone: (860) 298-3920

Mobile Phone: (413) 530-6184

blacey@limra.com