Typical U.S. retail investors say low interest rates help borrowers more than they hurt savers.
Working-age investors are more likely to say low rates have helped them personally than hurt them.
Retired investors are more likely to say low rates have hurt them personally than helped, but a majority say low rates have not seemed to have much of an effect on their finances.
Lydia Saad, an analyst at Gallup, has published data supporting those conclusions in a summary of results from a recent Gallup survey of 1,006 U.S. adults with $10,000 or more in investable assets. Wells Fargo & Company (NYSE:WFC) commissioned the survey as the Federal Reserve Board’s Open Market Committee was deciding whether to start raising the interest rates it uses to influence other lenders’ rates.
The Fed committee ended up deciding today to leave rates unchanged.
Life insurance companies have complained about the effects of recent years of low interest rates on the investments that help support products such as long-term care insurance, long-term disability insurance and annuities. Some have suggested that low rates also do serious harm to retirees who have been counting on being able to rely a steady flow of income from cash invested in bonds from issuers with good credit ratings.
When Gallup asked investors about their views, 68 percent said the primary effect of low rates has been to help consumers and business borrowers, and only 24 percent said the primary effect has been to hurt savers and investors.
The gap between the percentage of survey participants who say the primary effect has been good and the primary effect has been widened since 2012, when Gallup conducted a similar survey. In 2012, 66 percent of the participants said the primary effect of low rates to help borrowers, and 28 percent said the primary effect was to hurt savers and investors.
When Gallup asked the investors about the effects of today’s low rates on their own finances, 34 percent of the working-age participants said low rates had helped them, 12 percent said low rates had hurt them, and 53 percent said the low rates had not made much of a difference.
Responses from the retirees in the sample were different, but not that much different. Only 15 percent said low rates had helped them, and 28 percent said low rates had hurt them. But 55 percent said low rates have not made much of a difference.