With retail turnover increasing just 0.2 per cent in September and 0 per cent in October, it’s clear that the first round of tax refunds Australians received by late last year―around $1080―failed to produce the predicted boost to the retail sector.
Now, new research has confirmed where Aussies put their refunds―with 95 per cent of recipients confirming they didn’t spend it at the shops (in store or online).
Money.com.au―a new finance information platform for Australian consumers and business owners seeking loans and other financial products―commissioned a survey of an independent, nationally representative panel of 1006 Australian adults.
Seventy (70) per cent of respondents received tax refunds by mid-November last year. The survey asked them where they had put most of their tax refunds. The findings revealed that a third (33 per cent) put the refunds into their savings accounts, with more Aussies in their 30s (37 per cent) saving it. A further 28 per cent used the refunds to pay their bills, while eight (8) per cent spent their refunds on essential purchases, such as groceries and household repairs.
Other ways Aussies spent their tax refunds include paying down their mortgage (chosen by seven per cent of respondents) and paying off credit card debt (six per cent). Just five per cent spent their tax return at retail stores (in store or online).
Money.com.au also asked respondents who put their tax refund into their savings, what they plan on eventually doing with it. Nearly half (42 per cent) said they will keep it in their savings. Again, there were more under-30s (42 per cent) and 50s-somethings (54 per cent) who will continue to save their refunds. Twenty-six (26) per cent of those who put their tax refund into their savings say they’ll eventually spend it on bills or essential purchases, while 19 per cent said they will put it towards leisure activities such as a holiday. Thirteen per cent say they will eventually spend it on retail purchases.
“The lack of wage growth over the last few years and the rising costs of living has led to Aussies feeling the financial pressure,” licensed financial advisor and Money.com.au spokesperson, Helen Baker, says.
“In previous years, people would spend their tax return on retail and leisure, but the findings reveal that the majority of us are struggling and are anticipating that the hard times will continue. As such, the tax refunds are simply helping us to get by now―help us to catch up where we were behind, or help us in the future.
“The finding that under-30s and those in their 50s saving more than any other age group is reflective of these life stages. Younger Aussies likely have the goal of saving a deposit for a home, and must demonstrate to the banks that they can save. Those in their 50s are also changing their mindset and thinking about their retirement, and have only so many pay packets left.
“When we’re struggling to meet expenses, it’s easy to get caught in a cycle of debt. To reduce your interest payments in the short term, you could consider whether consolidating your debts into one loan or transferring your credit card debt onto a zero per cent balance transfer card is appropriate for you. Money.com.au provides lots of information for Aussies seeking to consolidate their debts, provides budgeting spreadsheets and provides savings calculators to help us get on top of our debts.”
