High-income households may be as worried about their financial health as less affluent households, a survey of American savings habits suggests.
The poll, commissioned by the American Savings Education Council and America Saves, indicates that savings practices across the nation have been weakened by the ongoing recession. From 2008 to 2010, the share of Americans who had a savings plan with specific goals dropped from 62 percent to 55 percent, the survey said. The share of those who save for retirement at work fell from 55 percent to 49 percent for that period. Stephen Brobeck, executive director of the Consumer Federation of America, said job losses and other forms of income reductions are narrowing Americans’ savings options. The survey polled more than 1,000 households in the first week of February, and it has a margin of error of plus or minus 3 percentage points.
One bit of good news. While 71 percent of Americans are still concerned about the effect of the recession on their personal finances, that number is down from 77 percent when the survey was last taken a year ago. The share of Americans expressing “great concern” fell from 53 percent to 43 percent.
One detail surprised Brobeck. Responses that were broken apart by household income showed that the share of Americans who were concerned about the recessionary impact on their personal finances was remarkably similar regardless of the size of income. It ranged from a low of 87 percent for households with less than $25,000 in income to a high of 91 percent for households with income of $75,000 to $100,000. Of households with income greater than $100,000, 89 percent were concerned. “Perception is reality,” Brobeck says. “Concern about recessionary impacts is very broad-based, across all income groups.” Those in the affluent segments with financial and real estate assets saw those values plunge, while those whose net worth is more dependent on wages also were affected because of the greater risks posed by unemployment, he notes.
The survey’s results, released today, launched the fourth annual America Saves Week, a national campaign aimed at raising awareness about the need for consumers to sock more money away. Increasingly, banks and other financial institutions are looking for ways to make the practice of saving money automatic. Last week the Financial Services Roundtable said it had developed a “best practices” program for automatic savings that it would promote with its members. The practices include free automatic transfers from checking to savings accounts, low minimum for automatic savers, and active promotion of those options.