Australian tax payers apparently aren’t so keen to splurge with their tax returns this year. As many as 35 per cent or 6.8 million of them plan to instead boost their savings, according to latest research.
If the average refund is $2600, it means a staggering $17.68 billion deposited in bank accounts.
Twelve per cent of Australians will use the extra money to meet household bills and seven per cent will pay down mortgages.
It’s tempting to suggest the findings, based on a national survey of a thousand respondents by comparison site Finder, are a result of COVID-induced anxiety.
Yet they’re surprisingly similar to the results of pre-pandemic tax payer research.
ASIC’s 2016 MoneySmart survey found 21 per cent of Australians who filed returns that year decided to save the entire amount. Some 29 per cent said they used the windfall to pay down bills.
A further nine per cent ploughed their refunds into mortgages.
A 2019 poll conducted by Melbourne-based ME Bank revealed almost half (48 per cent) of taxpayers intended saving or investing their refund, with 32 per cent opting to pay off debts.
While of little comfort to the ailing retail sector, Finder’s results, collected in May, suggest people typically not wanting to let even a modest financial break slip through their fingers.
“Most people have worked hard throughout the year for this extra cash, so it’s promising to see that just over a third of Aussies aren’t planning to spend it all at once,” said Finder spokeswoman Kate Browne.
“Australians are understandably wanting to save whatever cash they can, given the uncertain events of the past 12 months,” she added.
The survey found a small portion of respondents (five per cent) will also use the extra cash to wisely reduce credit card debt and four per cent will put the funds towards a holiday.
Perhaps induced by end-of-financial-year sales, three per cent of responde nts admitted they would use their refund to go shoppi ng.
Gen Z are the biggest savers, with almost half (45 per cent) planning to save their return. Twenty-three per cent of Baby Boomers intend doing the same.
Nearly 30 per cent of Australians, according to the survey, aren’t expecting a tax return.
Ms Browne reminds Australians that the extra savings could be a good buffer against any unforeseen costs in the coming financial year.
“The COVID-19 pandemic has shown us what an unforeseen financial event can look like, so for many Australians having a healthy savings account is top of mind,” she said.
AAP
Read more:
