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."
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