While no generation has been unaffected by the pandemic, Generation Z Canadians was hit particularly hard, found a new survey by the Canadian Bankers Association (CBA) released Nov. 9. 

This demographic of Canadians, aged 18-25, have had their education disrupted, career plans changed, and financial prospects diminished largely because they are overrepresented in the highly affected service sector, says the CBA. 

Fifty-three per cent of Gen Z respondents felt the pandemic upended their financial security, with that number rising to 73 per cent for those in less stable financial situations.

Despite this, 88 per cent of Gen Zers are feeling optimistic about their financial futures, with 98 per cent actively making plans to strengthen their financial resilience, found the survey. 

"Gen Z was dealt a disproportionately tough hand during the pandemic, but it has also shown incredible resilience in channeling its natural gifts for perseverance, adaptability and motivation," says Neil Parmenter, President and CEO, Canadian Bankers Association. "Despite the setbacks, younger Canadians are eager to forge ahead, be prepared for the unexpected and build bright futures as our economy recovers." 

Second disruptive event 

The CBA observed that the pandemic and the Great Recession of 2008-09 are two disruptive events that have marked Gen-Z. “Indeed, these two seismic events in their formative years have shaped a generation's worldview when it comes to their financial well-being,” says the association.

Notably, the survey found that Gen Z is keen to save. Seventy-four per cent of those surveyed have a savings account and 77 per cent say that they put at least one per cent of their income aside as savings, with an overall average of nine per cent of income saved. “While respondents in higher self-reported income groups are more likely to be savers, and save more on average, the majority (68 per cent) of those in less secure financial situations also have a savings mindset,” observes the CBA. 

Saving goals 

When asked what they are saving for, the overall top responses are: an emergency fund and financial independence. “Both goals are likely top of mind against the backdrop of the sudden and unexpected economic shock brought on by the pandemic,” says the CBA.

The most-cited savings vehicle is the Tax-Free Savings Accounts (47 per cent), followed by High Interest Savings Accounts (27 per cent) and Registered Retirement Savings Plans (20 per cent). 

Budgeting 

Gen Zers are taking active steps to track their expenses, control their spending and save money, the survey indicates. Overall, 71 per cent of Gen Z respondents say they are actively budgeting, with 58 per cent saying they do so in a formal manner by:  keeping a written record of expenditures (21 per cent); maintaining financial spreadsheets (20 per cent); or using digital tools (17 per cent).

While they are avid budgeters, 92 per cent of Gen Z respondents say they experience barriers with sticking to a budget, underlined the CBA. “The most common barrier is not earning enough money (43 per cent) – a sentiment particularly acute for more economically disadvantaged Gen Zers – followed by unexpected expenses (42 per cent) and shopping impulsively (38 per cent).” 

Government support 

Fifty-two per cent of Gen Zers say that they would have suffered greatly during the pandemic without government income supports. This rises to 73 per cent for respondents in basic and precarious financial situations, the CBA says. 

About two-thirds of Gen Zers surveyed received COVID-related emergency government benefits – 70 per cent among those in more unstable socio-economic situations. “Consistent with their savings mindset and penchant for budgeting, more than half (57 per cent) of Gen Zers who received emergency response and recovery benefits saved at least some of this money. And in response to a separate question, slightly less than half (48 per cent) say they used government benefits to help lower their debt,” noted the CBA. 

Majority carry debt 

The majority (73 per cent) of Gen Zers report having some type of debt, with the average reported debt load being $14,100. Among those with debt, the two most common are credit card (49 per cent) and student loans (39 per cent).

Fifty-one per cent of respondents say they have experienced anxiety related to debt during the pandemic. Tied to this, 41 per cent have seen their debt level increase because of the pandemic. Both proportions increase for those in less stable financial situations, at 81 per cent and 73 per cent respectively. 

The survey of Gen Z Canadians found that 69 per cent of Gen Zers have sought advice regarding financial planning or debt management, however only 47 per cent say a financial plan is key to a secure financial future. The most cited sources are friends and family (52 per cent), followed closely by financial institutions (30 per cent).