According to a recently published report by LendingClub Corporation in partnership with PYMNTS.com, 48 percent of Americans earning in excess of $100,000 per year are living paycheck to paycheck.
To compile the report PYMNTS.com collected 2,633 responses from U.S. consumers from Jan. 11 to Jan. 18, 2022.
The report indicates that 64 percent of all consumers in the U.S. were living paycheck to paycheck in January 2022, up from 61 percent just a month prior.
“The portion of consumers who live paycheck to paycheck now is four percentage points higher than it was in January 2021, and the wealthiest consumers comprise a growing share,” the report reads.
The number of Americans living paycheck to paycheck has fluctuated over the past several months. In May 2021, 39 percent of Americans lived paycheck to paycheck before reaching a high of 50 percent in November 2021.
The report indicates that the middle-class appears to be struggling the most, “The share of those who earn between $50,000 and $100,000 who report living paycheck to paycheck also is on the rise. In May 2021 53% of these middle-income consumers lived paycheck to paycheck. In January 2022, 67% reported living paycheck to paycheck — up from 66% in December 2021.”
The report comes after the United States reported that inflation in the country rose a staggering 7.5 percent over the past 12 months.
However, the number of people who report living paycheck to paycheck while still “comfortably” paying their bills has increased significantly since October 2021.
“In January 2022, 47% of consumers earning between $50,000 and $100,000 per year and 43% of those earning less than $50,000 reported living paycheck to paycheck without issues paying their bills,” PYMNTS.com reported.
Impact on savings
Not surprisingly, consumers who live paycheck to paycheck, who earn a low-income and struggle to pay their bills are finding it most difficult to save.
The report also revealed that consumers earning $50,000 to $100,000 per year who live paycheck to paycheck and struggle to pay their bills had an average savings of $2,360 compared to people with no issues paying their bills. People not experiencing issues paying their bills reported an average savings of $7,273.
For people earning less than $50,000 per year and who are experiencing difficulty paying their bills the reported average savings plummeted to just $788 compared to $4,369 for those without issues.
For consumers not living paycheck to paycheck the average savings for people earning less than $50,000 per year was $10,677. For the middle class — people earning between $50,000 and $100,000 — who are not struggling, savings increased to $16,932 and for high income earners, above $100k with no issues paying their bills, the average savings reported was $22,263.
Handling an emergency expense
The report revealed that nearly one-quarter of high-income consumers who also live paycheck to paycheck with issues paying their bills would not be able to manage a surprise expense of $400.00.
“Among consumers who earn more than $100,000, 23% who live paycheck to paycheck with issues paying their bills say they would not be able to pay a $400 emergency expense.”
Regarding middle- to low-income earners, “Fifty-two percent of those who earn less than $50,000 and 38% of those earning $50,000 to $100,000 say they would not be able to pay a $400 expense.”
In order to pay for a surprise expense 33 percent of high income earners would resort to using a credit card and pay it off over time while 20 percent would use a credit card and pay it off in full.