The financial health of working Americans remains fragile, according to the Financial Health Network’s Financial Health Pulse® 2025 U.S. Trends Report.
Last year’s report painted a troubling picture, with more than two-thirds of households (70%) considered not financially healthy and day-to-day indicators trending downward.
The 2025 findings show only slight improvement: just 31% of households are financially healthy. Gains in areas like debt manageability and spending less than income are encouraging, but they are fragile — and financial health remains out of reach for the majority of households.
For employers, this should be taken as a signal to reimagine traditional financial wellness strategies, which clearly aren’t supporting most employees’ real financial needs.
Read on for a look at the most important 2025 insights to better understand where employees are struggling and how you can best support them to prioritize your benefits dollars to improve their financial health.
Modest progress, but fragile gains
Between 2024 and 2025, the share of financially vulnerable households fell from 17% to 15%. Despite this improvement, the report notes that the share of households spending more than they earned is still higher than levels seen between 2018 and 2021. The report authors warn that the gains likely stemmed from cooling inflation and wage growth – both conditions that could shift quickly given uncertainty around tariffs and other changing economic policies.
Debt pressures are shifting
The percentage of households with unmanageable debt declined slightly, from 30% to 29%, while the share with no debt at all increased from 18% to 20%.
Fewer households reported carrying credit card or auto loan balances, which the report authors suggest may be due to high interest rates that discouraged borrowing or motivated them to tackle debt more aggressively.
Still, these decreases should not be read too optimistically. As the authors stress, “when viewed in the context of trends stretching back to 2018, it is clear that a substantial portion of the population continued to spend more than their income and struggle with debt.”
Lower-income households saw some relief — but gaps remain
After two years of rising distress, the past year’s modest decrease in financial vulnerability signals that cooling inflation and a stable job market have given some households breathing room, as low- and moderate-income households fell from 26% financially vulnerable in 2024 to 23% in 2025.
Despite this progress, the share of financially healthy households has not meaningfully increased since 2022, and persistent disparities between lower- and higher-income groups continue to stand out.
Student loan borrowers face renewed strain
After years of forbearance, late student loan payments began hitting credit reports in 2025, and many struggling borrowers have already seen their credit scores decline. The share of households with student loans reporting a “good” or better credit score fell from 69% in 2024 to 65% in 2025.
Looking ahead, collections activities on student loans in default, which include wage garnishment for loans that are 270+ days past due, combined with administrative backlogs and confusion around repayment and forgiveness programs, may further strain borrowers’ finances.
These findings underscore the need for employers to provide support for student loan borrowers, who remain at heightened risk of financial vulnerability.
Financial stress affects health and wellbeing
The report also highlights the close link between financial health, physical health, and mental health:
- Only 12% of people in poor overall health were financially healthy, compared to nearly half of those in excellent health.
- 37% of people with poor mental health were financially vulnerable, compared to just 5% of those with excellent mental health.
For HR and benefits leaders, the message is clear: most employees are not financially healthy, and their struggles ripple into healthcare costs, retention, absenteeism, and engagement.
While modest progress has been made, the overall picture underscores the need for financial wellbeing benefits that extend beyond typical financial wellness approaches such as financial education, traditional financial coaching, and retirement solutions, which are built for employees who have some level of financial stability and aren’t constantly battling everyday money problems.
Employees need support that helps them safely manage money emergencies, debt, credit, student loans – and all other financial needs – while also giving them safe tools to build savings so they can begin to establish financial resilience.
That’s the kind of comprehensive approach that moves the needle on employee financial health and why Fortune 500 customers offer Brightside Financial Care to their employees.
Learn more about Brightside and what makes us different from traditional financial wellness benefits.