Majority of Americans Have Taken a Financial Hit Due to Rising Interest Rates

As inflation cools, the majority of Americans say rising interest rates have hurt their finances in the last year.

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Wednesday, June 28, 2023
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Personal Finance, Insurance, Finance, Millennials, Banking, Professional Services, Baby Boomers, Generation X, Consumer, FINRA, Lavigne, Medicare, MN, Social, Retirement, Dairy Market Loss Assistance, Allianz Life, Social Security, Bank, Health insurance
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MINNESOTA, UNITED STATES, NORTH AMERICA, NEW YORK
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ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Summary
Key Points: 
  • As inflation cools, the majority of Americans say rising interest rates have hurt their finances in the last year.
  • Three in five Americans (61%) say they have taken a financial hit due to rising interest rates in the last 12 months, according to the 2023 Q2 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America ( Allianz Life ).
  • About two in five (38%) say they have benefitted financially from rising interest rates in the past 12 months.
  • “Rising interest rates can sometimes feel like a double-edged sword,” said Kelly LaVigne, vice president of consumer insights, Allianz Life.


As inflation cools, the majority of Americans say rising interest rates have hurt their finances in the last year. Three in five Americans (61%) say they have taken a financial hit due to rising interest rates in the last 12 months, according to the 2023 Q2 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America (Allianz Life).

To be sure, some Americans say rising interest rates helped them. About two in five (38%) say they have benefitted financially from rising interest rates in the past 12 months.

“Rising interest rates can sometimes feel like a double-edged sword,” said Kelly LaVigne, vice president of consumer insights, Allianz Life. “While savings accounts are earning more interest, it is also more expensive to borrow money for big purchases like a home and many Americans worry that rising interest rates are a harbinger of a recession.”

Concerns about a recession increased after months of decline. The majority of Americans (64%) worry that a major recession is right around the corner. This is up from 57% in Q1 2023 and 62% in Q4 2022. Boomers are the most concerned with 67% saying they worry a major recession is right around the corner, compared to 61% of Gen Xers and 63% of millennials.

Still, concerns about the future of federal programs for seniors persist. Overall, 80% of Americans worry about the future of Medicare and Social Security. Gen Xers are most worried with 86% saying they are worried about the future of Medicare and Social Security, compared to 79% of millennials and 79% of boomers.

Americans want protection from market loss

Along with recession fears, Americans say they are concerned about market volatility. Two in three Americans (66%) say they are keeping more money than they should out of the market because they are worried about loss.

“Even in this volatile market, it doesn’t make sense to leave too much cash on the sidelines,” said LaVigne. “You want to have an emergency fund but you are likely losing purchasing power by not putting your savings to work for you. For long-term goals like retirement, it is critical to take part in the market to try to alleviate the effects of inflation.”

An increasing number of Americans want financial products that help mitigate market risks. For example, 69% say it is important to have some of their retirement savings in a financial product that protects it from market loss, up from 60% at this time last year. Most Americans (62%) say they would stop using their current financial professional if they didn’t help reduce exposure to market volatility.

*Allianz Life conducted an online survey, the 2023 Q2 Quarterly Market Perceptions Study in May 2023 with a nationally representative sample of 1,004 Respondents age 18+.

Allianz Life Insurance Company of North America does not provide financial planning services.

Products are issued by Allianz Life Insurance Company of North America. Variable products are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.542.5427 www.allianzlife.com

This notice does not apply in the state of New York.

Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.

About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America, one of the FORTUNE 100 Best Companies to Work For® and one of the Ethisphere World’s Most Ethical Companies®, has been keeping its promises since 1896 by helping Americans achieve their retirement income and protection goals with a variety of annuity and life insurance products. In 2021, Allianz Life provided additional value to its policyholders via distributions of more than $10.6 billion. As a leading provider of fixed index annuities, registered index-linked annuities and fixed index universal life insurance, Allianz Life is part of Allianz SE, a global leader in the financial services industry with approximately 150,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field® in St. Paul, Minnesota, home of Major League Soccer’s Minnesota United.

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