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
ASIC has released the results of its first adviser exam to be held in 2025 with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
