CHICAGO (NewsNation Now)— One in 4 Americans have no emergency fund as more people reported having less savings than before the pandemic, according to a new study.
A Bankrate July 2021 Emergency Savings survey tracked a gloomy picture of the financial state for many Americans.
More than half reported having less than three months in savings. The numbers get worse depending on the age and income of those surveyed.
“Just 1 in 6 households report having more emergency savings now than prior to the pandemic, and it is predominantly higher income households and those with fully funded emergency savings,” Greg McBride, CFA, Bankrate chief financial analyst explained in an interview discussing the results.
34% of all people surveyed had less money in their savings accounts than they did a year ago. Many attributed the change to pandemic related expenses.
The financial impact of the COVID-19 pandemic is still not fully known, but a May 2020 Federal Reserve Survey estimated that nearly 22.2 million positions were wiped out by the pandemic
Bankrate notes that financial planners typically recommended saving six to nine months worth of expenses. 25% of those surveyed, predominately those making $75,000 or more, stated having that in an emergency fund.
Those making less than $30,000 were most likely to report having no savings, about 49% of those surveyed.
Younger Americans are the most impacted by the lack of financial savings with 57% of millennials stating they had less than three months of expenses saved or none at all.
COVID-19’s impact on savings accounts depended on the household’s income as well.
While 42% of Americans reported their savings stayed the same, 34% reported having less in their emergency funds because of the pandemic.
The economy is beginning to rebound from the pandemic with employers having added an average of nearly 543,000 jobs a month since January. Federal Reserve officials anticipating overall economic growth of roughly 7% this year that would be the highest since 1984.
The impact of that on people’s savings accounts won’t be clear in the immediate future, but there is hope the improved economy will help.
The Associated Press contributed to this report