Rising costs and economic uncertainty are pushing many American borrowers into a state of financial vulnerability, according to Securian Financial’s third annual lending environment study. The research, which surveyed more than 1,000 current and prospective borrowers, found that 50% of individuals with active loans could continue making payments for just three months or less if they suddenly lost their income. Nearly one in five respondents, or 19%, indicated they would struggle to make payments in less than one month following an income disruption.

Financial stress and protection gaps

The study identifies a shift in consumer behavior from pursuing financial goals to protecting existing assets, a trend described as moving from "financial offense" to "financial defense." Borrowers’ primary concerns center on affordability and unexpected shocks. Rising everyday expenses were cited as a top financial concern by 64% of respondents, followed by emergency expenses at 54% and medical expenses at 41%. Additionally, 35% of respondents worried about job loss or reduced income, while 29% expressed concern about damage to their credit score.

Despite these risks, the adoption of loan payment protection products, such as debt protection and credit insurance, remains limited. Only 22% of borrowers reported purchasing such a product. This low adoption rate persists even though 77% of respondents acknowledged that these products provide helpful financial security, and 74% agreed they help people stay on track financially. Skepticism plays a significant role in this hesitation, with 48% viewing the products primarily as a way for lenders to generate revenue and 33% perceiving them as a "junk fee."

Trust and lender relationships

The findings suggest that financial institutions face a critical trust deficit when supporting consumers during hardship. Transparency and fair pricing are expected, but borrower loyalty is increasingly influenced by how lenders behave during financial difficulties. The study found that 90% of respondents would be likely to stay with a financial institution long term if a loan payment protection product helped them through a difficult time. Furthermore, 85% said their trust in a lender would increase if the institution helped cover loan payments during a hardship.

Trust factors are heavily influenced by the clarity and cost of protection products. The cost of protection was identified as the top factor influencing trust by 52% of respondents, followed by clear explanations of how the product works (40%), coverage details (38%), and transparency around loan terms (37%).

Generational differences

The study highlights distinct generational variations in attitudes toward financial protection. Gen Z borrowers are the most likely to purchase loan payment protection, with a 31% adoption rate, yet they are also the most likely to find the products confusing. Conversely, Boomers are the least likely to purchase protection products, with only 15% adoption, and are the most skeptical, with 51% believing the products primarily serve as revenue generators for lenders.

Recommendations for lenders

To address these challenges, Securian Financial recommends that lenders move beyond compliance-focused communications and explain products in plain language tied to real-life scenarios. The study advises financial institutions to help borrowers understand their financial vulnerabilities rather than assuming confidence equals preparedness. Additionally, lenders are encouraged to position protection products as part of a broader financial support ecosystem that includes hardship assistance and financial wellness resources. Creating hybrid experiences that combine digital convenience with access to human guidance is also suggested to better serve diverse borrower needs.

Only 25% of Americans believe it is currently a good time to invest in the market, a decline from 34% in the previous quarter, according to the Q2 2026 Quarterly Market Perceptions Study released by the Allianz Center for the Future of Retirement. The drop in confidence mirrors sentiment last seen in Q2 2022 during a surge in inflation. The study highlights growing caution among investors as concerns about a potential recession and ongoing market volatility rise.

The findings indicate that 62% of respondents worry a major recession is imminent, an increase from 54% in the prior quarter. Additionally, 71% are concerned that continued market volatility could negatively impact their long-term financial plans. In response to these conditions, 50% of Americans have made changes to their investments to make them less risky because of recent market volatility.

Investor Sentiment and Demographics

Recession anxiety varies across generations, with Boomers (57%) less likely to express concern compared to Gen X (62%), millennials (65%), and Gen Z (63%). When it comes to adjusting portfolios, Gen Z investors are the most active; 59% of Gen Zers have made changes to reduce risk, compared to 55% of millennials, 45% of Gen Xers, and 41% of Boomers.

Risk Tolerance and Financial Professional Impact

The study found that 58% of Americans are looking to add more protection to their portfolios following recent volatility. However, willingness to take on risk to combat inflation is declining, with only 47% comfortable doing so, down from 54% last quarter. The stakes for financial professionals are high, as 62% of respondents stated they would stop using their current financial professional if they did not help reduce exposure to market volatility.

Economic Anxiety Among Younger Generations

Younger Americans report significant financial strain. Gen Z is the most concerned about job security, with 62% worried about being laid off due to an economic downturn in 2026, compared to 47% of millennials and 37% of Gen X. Furthermore, 75% of Gen Zers report they have not been able to contribute to their savings as much in the past six months due to the current economic environment.

The Allianz Center for the Future of Retirement conducted an online survey in May 2026 with a nationally representative sample of 1,003 respondents aged 18 and older in the contiguous U.S.