Squeeze on Household Incomes

After decades of continuous progress, the financial crisis has knocked household finances sideways. U.S. investors surveyed find themselves having to juggle a number of competing financial goals as incomes feel the squeeze. The aspiration to manage long-term finances and prepare for retirement remains strong, however, this aspiration is being dealt a blow as the need to pay off debts takes priority in the short and medium term. The percentage of take-home pay devoted to living costs, bills and debt is particularly high in the U.S. (49%) compared to the global average (40%).

Investor Pulse Take Home Pay Allocation in the US vs. The World Infographic

These costs translate into widespread personal savings deficits in the U.S. Americans reported saving, on average, just 16% of their take-home pay each month—compared with the global average of 18%. And when asked what would encourage them to invest more of their cash savings, nearly one in three (32%) respondents indicated "less personal debt."

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