Americans' Financial Security Surges, Most Consumers Unfazed by Higher Payroll Tax Rate
NEW YORK, March 25, 2013 /PRNewswire/ -- Aided by new stock market highs and continued job growth, consumers' feelings of financial security improved markedly over the past month, according to new research from Bankrate.com (NYSE: RATE).
Bankrate's March Financial Security Index reading of 101.5 is the highest since the monthly polls began in December 2010. The 4.7-point jump from February's 96.8 is the second-biggest monthly gain in the Index's history (after a five-point gain from April 2011 to May 2011). This is only the third time in the past 28 months that consumers are feeling better about their financial security versus 12 months prior.
Bankrate found that more than half of working Americans either haven't noticed (48%) or have been unaffected by (7%) the January 1 expiration of the payroll tax cut. Thirty percent of working Americans have cut their spending as a result. Eight percent are putting less money into savings and 3% have scaled back retirement contributions.
"What is shocking is that the lowest-income households were the least likely to have cut back on spending and the most likely not to have noticed the change in the payroll tax," said Greg McBride, CFA, Bankrate.com's senior financial analyst. "These results contradict the widely held assumption that lower-income households would feel the biggest squeeze from the payroll tax cut expiring."
Those most likely to have cut spending were households with income between $50,000 and $75,000 per year. The same surprising results were evident when evaluating on the basis of educational attainment: households headed by college graduates were the most likely to have cut spending, whereas households headed by those with less than a college degree were the most likely not to have noticed the higher payroll tax rate.
Four of the Financial Security Index's five components (job security, debt, net worth and overall financial situation) indicate that Americans are better off now than one year ago; savings is the only laggard. All five components improved over the past month.
The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here:
PSRAI obtained telephone interviews with a nationally representative sample of 1,006 adults living in the continental United States. Interviews were conducted by landline (501) and cell phone (505, including 242 without a landline phone) in English by Princeton Data Source from March 7-10, 2013. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator, and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC, and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe.
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SOURCE Bankrate, Inc.