The interest, effort, and effectiveness of Americans to save money declined in the last year, according to new research from America Saves. And while savings effort and effectiveness are at a three-year low across the board, the declines were most concentrated among low- and moderate-income Americans.
The most recent America Saves Personal Savings Index measured American’s savings interest at 65 percent, savings effort at 55 percent, and savings effectiveness at 53 percent. It’s been measured three times a year since September 2013.
The Personal Savings Index naturally climbs and falls throughout the year as people save, splurge over the holidays, and then recover from their financial hangovers. So, while savings indicators from September are down slightly since May of this year, they are remarkably lower than previous Septembers, and a growing savings gap among the poorest and wealthiest Americans is to blame.
Overall, savings effectiveness fell 10 percentage points, savings effort fell 10 percentage points, and savings effectiveness fell 9 percentage points from September 2015 to September 2016.
Declines to the personal savings index were much steeper for low- and moderate-income Americans. For those earning below $25,000, savings effectiveness declined from 55 percent to 39 percent. And for those with incomes between $25,000 and $50,000, savings effectiveness declined from 63 percent to 48 percent.
Meanwhile, for Americans earning $100,000 and above, savings effectiveness is unchanged from a year ago, and is at the highest level of any September surveyed. As a result, the savings effectiveness gap between the poorest and wealthiest Americans doubled from 16 percentage points in September 2015 to 32 percentage points in September 2016.
America Saves motivates, encourages, and supports low- to moderate-income households to save money, reduce debt, and build wealth. Two of our largest efforts to encourage low-to moderate-income households to save money are our over 60 local campaigns and the America Saves for Young Workers initiative, which works with summer youth employment programs to motivate young first-time summer workers from low-income households to set up direct deposit to save a portion of their pay.
Last year our local campaigns introduced the pledge to 17,600 individuals and launched two new campaigns – Point Loma University Saves in California and Prince William Saves in Virginia. In the summer of 2016, America Saves for Young Workers motivated 8,059 young workers to pledge to save a total of $4,377,364.
The savings effectiveness gap is growing between the poorest and wealthiest Americans >> http://bit.ly/2eWxFHj v/ research from @AmericaSaves
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