An impact of COVID-19 on savings: A rising sense of financial insecurity (2024)

FAQs

An impact of COVID-19 on savings: A rising sense of financial insecurity? ›

The COVID-19 pandemic has generated a sense of financial insecurity—even among the well-off. While the pandemic is a health crisis, the biggest motivator for saving more is “in case I have large, unexpected costs,” reinforcing the evidence that individuals now want to be prepared for unwelcome contingencies.

From 2020 to 2023, the cumulative net economic output of the United States will amount to about $103 trillion. Without the pandemic, the total of GDP over those four years would have been $117 trillion – nearly 14% higher in inflation-adjusted 2020 dollars, according to our analysis.

While saving rates have fallen across the board relative to 2020-21, only in the United States has the rate dropped below its pre-pandemic average. This divergence is quite stark. The average U.S. saving rate since 2022 is down some 2.5 percentage points from the 2015-19 average.

Some common causes of stress during the coronavirus pandemic are uncertainty, lack of routine and reduced social support, says Mark Flanagan, LMSW, MPH, MA, a social worker at Cancer Wellness at Piedmont.

Sometimes talking to a trusted person, a friend or family member, is a good and easy way to feel better. You can keep a diary. When we share what's bothering us with someone, it is more likely we will feel relieved and better understand the situation we are in and the feelings that come with it.

Financial market trends since COVID

The S&P 500 index fell 19.4%, and the Down Jones Industrial Average fell 8.9%. Tech stocks were some of the worst performers, down between 22% and 66%. COVID's impact on the stock market in 2023, however, is much less severe than earlier in the pandemic, says Haworth.

The COVID-19 recession and the Great Recession caused large market income declines among different groups. This can be observed in Figure 1, which shows the share of working-age adults with a large (10 percent) income decline based on their centile in the prior-year income distribution.

The pandemic was associated with a high prevalence of anxiety and depression symptoms in adults. Research suggests that these symptoms increased during the pandemic, but the extent of this increase is unclear.

Stress and worry are common during a crisis. But something like the COVID-19 pandemic can push people beyond their ability to cope. In surveys, the most common symptoms reported were trouble sleeping and feeling anxiety or nervous. The number of people noting those symptoms went up and down in surveys given over time.

The COVID-19 pandemic is ravaging all areas of human life (e.g., social, financial), creating distress, and exacerbating mental health issues [1, 2]. Recent research suggests that traumatic stress reactions during the pandemic—including intrusive re-experiencing and heightened arousal—are particularly prevalent [3, 4].

How has the pandemic affected you? ›

There was a reduction in physical activity, leading to an increase in sedentary behavior time. People spent more hours on TV and the internet. Constant too were changes in eating habits⁽²⁾. Public health crises, such as the COVID-19 pandemic, bring with them great stress, concern and anxiety for society.

Long COVID causes inflammation in the brain that can cause the release of cytokines (proteins that are secreted from certain cells in the immune system) that are known to cause... fatigue, low energy, and low motivation ― symptoms which are also associated with depression and anxiety.

The AHA estimates the net financial impact of COVID-19 hospitalizations over a four-month period will be $36.6 billion. In other words, the nation's hospitals and health systems will collectively lose $36.6 billion, including payments for COVID-19 patients, from March to June 2020 treating COVID-19 patients alone.

COVID-19 to slash global economic output by $8.5 trillion over next two years. Against the backdrop of a devastating pandemic, the global economy is projected to contract sharply by 3.2 per cent this year, according to the United Nations World Economic Situation and Prospects (WESP) mid-2020 report, released today.

In 2020, this increased funding accounted for an additional $125 billion in federal public health expenditures largely through increased funding for the Public Health and Social Services Emergency Fund.

Highlights from the report include: Credit risk is elevated and transitioning as the economic downturn continues to affect some borrowers' ability to service debts. Assistance programs and federal, state, and local stimulus programs have suppressed past-due levels.