Tax returns to be used cautiously
Most Australians will be cautiously using their tax returns this year due to the COVID-19 pandemic, according to research from comparison website Finder.
A survey of over 1,000 respondents found 38% planned to put their tax return straight into savings this year, and based on the average refund of $2,381 last year, that would equate to $17.4 billion this tax season.
Finder’s research showed that 43% would use their return to pay off debt, which included 12% to pay mortgage and another 12% using it cover household bills.
Almost one in five would be using it to pay of their HECS debt, credit card or personal loan, but 9% were still willing to use it for a holiday, while 8% would use it for shopping.
Gen Z were planning to be the biggest savers with 58% putting it away but only 21% of Baby Boomers would do the same; while 16% of men would use it for their mortgage as opposed to 9% of women.
Kate Browne, personal finance expert at Finder, said a tax refund could be the helping hand that some Australians needed to get back on their feet.
“Australia is dealing with the economic fallout of a global pandemic, with all signs pointing to a lengthy recovery,” Browne said.
“Many people are uneasy about what’s in store over the next 12 months, so financial security is understandably a big priority.
“With payment freezes and Government handouts like JobKeeper and JobSeeker ending or being greatly reduced, it's important to have a financial safety net in place for when this period ends."
AUTHOR
Chris Dastoor
Recommended for you
The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted.
After seven weeks of strong growth, Wealth Data analysis shows financial adviser gains are now tapering off and returning to a regular pace.
Count chief executive Hugh Humphrey has said FY25 was a “milestone year” for the business as it completed its Diverger integration, exceeding targets with $5.1 million in cost synergies.
US wealth manager Focus Financial Partners, which includes Australia’s Escala Partners, has appointed a chief strategy officer to fuel further Australian growth.
