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Financial education must be rethought post-Covid

Financial education must be rethought post-Covid
 Pexels/Anna Shvets

The pandemic has caused an unprecedented economic shock on top of a tragic health emergency.

And we will be living with the consequences of both long after our face masks and protective screens have been discarded.

As entire economies shut down to contain the virus, millions of workers have been unable to return to their jobs – some temporarily, some permanently.

Entire industries and sectors have been affected. Younger workers have been hit particularly hard by the shutdown, becoming unemployed or unable to get on the career ladder.

The pandemic has accelerated many of the structural changes already taking place in the economy, including those from digitalisation and artificial intelligence. It has also laid bare weaknesses in public health and welfare systems.

Millions of vulnerable workers have not received adequate financial education to understand the possibility of protecting themselves against unemployment, insufficient income in retirement or to cover health needs.

Key points

  • The world has changed dramatically over the past six months
  • The state will no longer be the insurer of last resort
  • There might be a phased withdrawal from the workforce

People who are self-employed, work part-time or are part of the gig economy have been affected disproportionately.

In the months and years ahead, people will need appropriate financial advice, education and support to adapt and respond to unprecedented challenges while learning to take advantage of new opportunities, and employers have a critical role to play.

So much feels ‘broken’ now, but we must reflect on the fact that the world of work was far from perfect before the pandemic. ‘Build back better’ is already something of a cliché, but it is certainly true that we now must put sustainability and fairness at the centre of our post-pandemic world.

The pandemic has not yet run its course and we do not have all the answers. But our new report – Shaping a brighter world of work: The case for a new social contract – proposes sustainable actions with benefits for workers, employers and government.

It draws on insights from the Zurich Insurance Group’s five-year research collaboration with the Smith School at University of Oxford. These are based on responses from thousands of workers across 17 countries, business and consumer surveys, and in-depth interviews with Zurich B2B customers on the future of work amid a pandemic. 

It seems inevitable that the state will no longer be the insurer of last resort, particularly due to rising government debt levels.

Our research supports the case for building new public-private partnerships between governments, employers, insurers, and benefits providers to protect workers against the enhanced risks of a post-pandemic economy.

Financial security

At the same time, after experiencing the dramatic upheaval of the pandemic, a more risk-averse workforce will have greater need of, and appetite for, protection guidance.  

Redistribution will be a necessary feature of compulsory insurance schemes as a means of reducing inequality and shoring up intergenerational solidarity.