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As employees continue to face financial challenges due to rising inflation and economic uncertainty, among those struggling are people working in the public sector.
Purchasing Power, a provider of financial wellness solutions to employers, conducts annual research on the state of employee financial wellbeing. This year's survey was conducted specifically among public sector employees in an attempt to better understand their unique financial needs and concerns, and to address solutions that can help meet their more immediate financial challenges.
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The survey revealed that 83% of US public sector employees experience financial stress (physical, mental or emotional). Ongoing economic challenges seem to be the root cause, with 50% of public sector employees reporting increased stress this year compared to last. Of those, 63% expect that level to remain or increase by next year.
Top financial worries include:
- lack of emergency savings for unexpected expenses (54%)
- inability to pay all monthly bills on time, living paycheck to paycheck (38%)
- ability to cover regular expenses but no extra income to build savings (32%)
- concern over the ability to pay credit card bills on time (26%)
- incurring additional new debt on top of existing debt (23%)
- having less than $500 or nothing at all saved for emergencies (34%)
Long term financial success seems to have been stunted due to issues in the short term. Only 14% of public sector employees report they are comfortably achieving financial well-being. Another 28% score themselves as above average, 36% as average, and 22% as below average or struggling to make ends meet. More than 70% of public sector employees had unexpected expenses/emergencies last year.
Many were unprepared — 34% had saved less than $500 to nothing at all.
Related: Benefits forecast for 2026: Growing demand for retirement & financial well-being benefits
Nearly two in three full-time public sector workers agree that employers have a responsibility to help their employees improve their financial well-being.
"Many of these organizations' frontline workers helped sustain our communities during the pandemic," said Trey Loughran, CEO of Purchasing Power. "This new survey enhances our knowledge of public sector employees and sheds light on the financial challenges and benefit options they need most."
The survey revealed several additional financial stress points for public sector employees, primarily stemming from current inflation issues:
- not being able to follow a monthly budget (41%)
- nearly or fully maxing-out credit cards (22%)
- having less in a retirement fund due to early withdrawals (18%)
- having to postpone medical care or reduce intake of prescription medication due to rising costs (15%).
"Given our longstanding history working with public sector organizations, we felt extremely responsible to better understand today's mindset of the public sector employee as it relates to their financial well-being," said Assad Lazarus, Chief Client and Development Officer at Purchasing Power.
"Once these current issues can be met more effectively, employees will be in a better position to participate more freely with traditional long-term financial programs, such as retirement savings and investments."
In the face of these stressors, both public and private sector workers retain great value from financial wellness programs. Some programs viewed favorably in the survey include —
- Identity theft protection (an insurance policy that helps prevent ID theft)
- Financial counseling
- Medical deductible financing
- Student loan repayment benefit program
- Early wage access benefit
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