Savings May Not Last People Much Longer
When SaverLife compared members’ net change in income—from employers and unemployment benefits— between March (when the pandemic began) to June, we found that just over 25% reported a lower income. Digging a little deeper, we looked at their savings’ balances and found that if people need to cover a gap in income with savings, most will deplete their savings within a month, and nearly all of them will deplete their savings in three months.
Of the 20% of people with one month in savings to cover their income shortfall, 9% are receiving unemployment benefits, meaning that when the extra $600 a week ends this month, those savings will be depleted even faster. Of the remaining 80%, whose income is the same or higher than pre-pandemic, 15% are receiving unemployment, meaning they may begin facing a savings cliff once heightened CARES Act unemployment benefits lapse at the end of July.
