Harris Poll Reports Personal Savings, Investments Falling, and Few Adopting Overdraft Protection

NEW YORK, February 2, 2011 /PRNewswire/ According to the latest Harris Poll, 34% of Americans have no retirement savings and 27% have no personal savings.  Just 18 months ago those numbers were notably lower, at 30% and 22% respectively.

Generationally, 25% Baby Boomers and 22% of Matures have no retirement savings (see Table One).  Among Gen Xers, those aged 34-45, 32% have no personal savings.

Regarding investments, 14% of Baby Boomers and Matures each state that their personal savings is mostly invested in stocks or mutual funds.

“Current economic conditions seem to be driving somewhat less risky investment behavior by Gen Xers, which goes against the grain of traditional investment advice,” stated Barbara Bertner, Vice President of Financial Services Research for Harris Interactive. “A combination of trust and education would likely bring these consumers back into alignment with traditional investment thinking.”

Overdrafts

The latest Harris survey also finds that most people with bank accounts have heard nothing (24%) or only a little (35%) about new rules regarding overdraft and overdraft protection.  While 41% bank customers say they know all about these new rules, only one in every six (16%) have "opted in" for this service by signing an agreement to permit their bank to make payments that exceed their balances (see Table six, below).

Other results of the current Harris Poll survey include:

  • A 31% plurality of all adults report that they keep their personal savings mostly in bank savings and/or CDs, 17% keep "a relatively equal mix of stocks/mutual funds and investments such as bonds and money market funds", 11% keep their personal savings "mostly in stocks and/or mutual funds", 8% keep theirs "mostly in bonds, money market funds and other stable investments", and just over a quarter of all adults (27%) say they have no personal savings or investments;
  • The relatively small proportions of adults who keep an "equal mix" of their personal savings in equities (stocks or mutual funds) is somewhat higher among Baby Boomers and people over 65 (23% and 22% respectively) than it is among those aged 45 or younger (between 7% and 18%);
  • When asked specifically about their retirement savings, rather more people report having these invested "mostly" (18%) or "an equal mix" (22%) in stocks and mutual funds. However, 34% of all adults have no retirement savings, including 25% of Baby Boomers and 22% of people aged 65 or older; and,
  • Most people have not changed the portfolio mix in the last 6 months of either their personal savings and investments (70%) or their retirement savings and investments (74%).  Relatively small numbers have moved their investments into or out of stocks, bonds, bank savings, money market funds and CDs.

If Americans are depleting both short and long term investments to make ends meet today—many may not have retirement savings when they need it.  Financial experts have traditionally advised younger investors to invest heavily in equities for the long term and older investors to move more of their savings into less volatile investments. This survey suggests that relatively few people under 45 have followed this advice given current economic conditions.

Gen Xers appear to be keeping money out of the markets in favor of less risky investments, possibly a result of being skittish about market conditions.  As Bertner states above, companies who understand Gen Xers investment attitudes and present new products with that in mind will generate a greater share of wallet among this group.

TABLE 1

PERSONAL SAVINGS

"How are your personal savings invested? "

Base: All adults

 

May-09

Nov. 2010

Generation

Echo Boomers (18-33)

Gen X (34-45)

Baby Boomers (46-64)

Matures (65+)

%

%

%

%

%

%

Mostly in bank savings and/or CD's

34

31

41

30

22

31

Relatively equal mix of stocks/mutual funds and investments such as bonds and money market funds

18

17

7

18

23

22

Mostly in stocks and/or mutual funds

11

11

7

11

14

14

Mostly in bonds, money market funds and other stable investments

8

8

4

6

10

13

Not at all sure

6

6

7

3

6

7

I don't have any personal savings

22

27

33

32

26

14

Note: Percentages may not add up exactly to 100% due to rounding.

TABLE 2

RETIREMENT SAVINGS

"How are your retirement savings invested?"

Base: All adults

 

May-09

Nov. 2010

Generation

Echo Boomers (18-33)

Gen X (34-45)

Baby Boomers (46-64)

Matures (65+)

%

%

%

%

%

%

Relatively equal mix of stocks/mutual funds and investments such as bonds and money market funds

19

22

10

23

28

29

Mostly in stocks and/or mutual funds

21

18

16

27

18

12

Mostly in bonds, money market funds and other stable investments

13

10

6

6

13

16

Mostly in bank savings and/or CD's

8

8

6

4

9

14

Not at all sure

9

8

10

8

7

7

I don't have any retirement savings

30

34

53

32

25

22

Note: Percentages may not add up exactly to 100% due to r ounding.

TABLE 3

PERSONAL SAVINGS CHANGED

"How have you changed your personal savings and investments in the past 6 months?"

Base: Adults who have personal saving s

 

May-09

Nov. 2010

Education

H.S. or less

Some college

College grad

Post grad

%

%

%

%

%

%

Have not changed anything

62

70

74

75

60

61

Added to bank savings and/or CDs

21

12

12

13

15

9

Added to stocks and/or mutual funds

8

9

5

6

14

15

Moved money out of bank savings and/or CDs

5

6

6

2

12

7

Added to bonds, mutual market funds and other stable investments

6

6

4

3

11

10

Moved funds out of stocks and/or mutual funds

9

5

1

4

8

8

Moved money out of bonds, money market funds and other stable investments

3

4

4

2

7

3

Note: Percentages may not add up exactly to 100% due to rounding.

TABLE 4

RETIREMENT SAVINGS CHANGED

"How have you changed your retirement savings and investments in the past 6 months?"

Base: Adults who have retirement savings

 

May-09

Nov. 2010

Education

H.S. or less

Some college

College grad

Post grad

%

%

%

%

%

%

Have not changed anything

65

74

81

80

63

65

Added to stocks and/or mutual funds

7

8

6

5

14

9

Added to bonds, mutual market funds and other stable investments

8

7

4

5

10

11

Have increased my personal 401-k/403B/IRA contribution

6

6

1

4

10

15

Moved funds out of stocks and/or mutual funds

10

6

4

5

7

10

Added to bank savings and/or CDs

10

5

6

4

8

3

Have decreased my personal 401-k/403B/IRA contribution

6

4

3

2

7

5

Moved money out of bank savings and/or CDs

2

2

2

1

4

3

Moved money out of bonds, money market funds and other stable investments

3

1

*

2

3

1

Note: Percentages may not add up exactly to 100% due to rounding; * indicates less than .05%

TABLE 5

CHANGING REGULATION

"Historically, when a customer used their ATM or debit card and their account did not have enough money to pay for the transaction, banks would approve the transaction, create an overdraft, and then sometimes charge a fee for the overdraft service.  New regulations now require that the custom er sign an agreement on a yearly basis to permit the bank to approve these types of ATM or debit card transactions.  Unless the customer has "opted-in" to the service in advance, when an account has insufficient funds, the transaction will be declined.  Were you aware that regulations were changing with respect to overdrafts on electronic transactions from bank accounts?"

Base: Adults who have a bank account*

 

Apr-10

Nov. 2010

%

%

Know all about it

27

41

Heard a little about it

37

35

Never heard of it

36

24

Note: Percentages may not add up exactly to 100% due to rounding; *94% of all U.S. adults have a bank accoun t.

TABLE 6

OPTING IN

"Under the new laws you can opt-in to allow your bank to automatically approve overdrafts when you have insufficient funds.  There would be a fee and you could opt-out at any time.  How likely do you think you will be to opt-in to the overdraft agreement?"

Base: Adults who have a bank account

 

Apr-10

Nov. 2010

Generation

Echo Boomers (18-33)

Gen X (34-45)

Baby Boomers (46-64)

Matures (65+)

%

%

%

%

%

%

Likely (NET)

29

22

18

23

27

14

    Extremely likely

5

4

4

3

4

4

    Very likely

9

7

7

6

8

4

    Somewhat likely

15

11

8

14

16

6

Not likely (NET)

51

44

47

41

41

51

    Not very likely

17

15

12

17

12

21

    Not at all likely

34

30

34

24

29

30

I have already opted in to this type of service

NA

16

12

20

18

13

Not sure – I would need more information

20

13

18

12

10

11

NA – I do not have an ATM or debit card

NA

5

5

4

4

10

Note: Percentages may not add up exactly to 100% due to rounding; NA indicates this was no t an answer choice

TABLE 7

CHANGING BANKS

"How likely are you to change your primary bank in t he next 12 months?"

Base: Adults who have a bank account

 

Apr-10

Nov. 2010

Generation

Echo Boomers (18-33)

Gen X (34-45)

Baby Boomers (46-64)

Matures (65+)

%

%

%

%

%

%

Likely (NET)

14

15

23

15

12

8

    Extremely likely

2

2

5

2

1

2

    Very likely

3

3

5

1

2

3

    Somewhat likely

9

10

14

13

9

4

Not likely (NET)

86

85

77

85

88

92

    Not very likely

30

31

29

33

30

34

    Not at all likely

56

54

47

52

58

57

Note: Percentages may not add up exactly to 100% due to rounding

Posted by Mark Rodrigues at 2/3/2011 8:24 AM
Categories: Deposits, Psychology, Measurement, wealth marketing, Checking Accounts
 

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