NCPA - National Center for Policy Analysis

Lower-Income Households Continue to Face Savings Challenges

August 27, 2015

The U.S. Department of Treasury in 2012 ended all sales of paper savings bonds, saving $70 million from 2012-2016. Now, with the exception of the Tax Time Savings Bond program (2010), the only way for taxpayers to purchase paper savings bonds is through TreasuryDirect®. Unfortunately, for lower-income households, using TreasuryDirect® can be a challenge since both Internet access and a bank account are required.

  • One-third of the Tax Time Savings Bond program were lower-income tax filers (gross income ≤ $25,000).
  • About 55,000 of tax filers from 2010-2013 had incomes of $25,000 or less and purchased on average about $250 per filer each year.
  • The Treasury Retail Investment Manager (TRIM) is investigating ways to make purchasing savings bonds easier for low-income families, such as using mobile devices.
  • Savings and financial assets for income earners with a median annual income of $14,200 was assessed by the Survey of Consumer Finances in 2013 at $550.
  • Several programs have been developed by federal agencies to promote savings for lower-income families for the purposes of retirement, child development or emergencies.

After analysis the GAO reported that the Treasury should consider both costs and benefits when discussing alternatives to program decisions regarding whether to discontinue the Tax Time program when TRIM makes an electronic alternative available.

Source: Cindy Brown Barnes, "U.S. Savings Bonds: Future of Offering Paper Savings Bonds at Tax Time is Uncertain, and Lower-Income Households Continue to Face Savings Challenges," Government Accountability Office, August 17, 2015.

Sponsored Links: Best Buy Flyer, Giant Tiger Flyer, Sears Catalogue


Browse more articles on Tax and Spending Issues