No fun refunds: 1 in 4 Aussies to spend tax return on household bills
A tax-time cash injection will go straight into savings or to pay household bills as living expenses soar, according to new research by Finder.
A Finder survey of 1,012 respondents – 465 of whom are expecting a tax refund – revealed almost half (47%) are planning to use the money to beef up their bank account.
Over 9 million Australians (46%) expect a tax return this year. The average person is anticipating a refund of $1,288 – a whopping $12 billion nationwide.
The research found almost 1 in 4 taxpayers (23%) will use the extra cash to pay for household bills as expenses like insurance and electricity burn a bigger hole in their pocket.
One in ten (9%) plan to put it towards paying off their mortgage as interest rates remain high.
Slightly fewer (8%) intend to pay for a holiday, while 4% will pay off their credit card with the extra cash.
Sarah Megginson, personal finance expert at Finder, said it's necessities before luxuries this tax time.
"Aussies are fed up with barely scraping by and are looking to their tax return to provide a bit of financial relief.
"Many are struggling with debt and a significant proportion of people plan to reduce that burden with their tax time cash injection."
Finder's research found a shopping spree (4%), investing in shares (2%) and paying off buy-now-pay-later debt (1%) or a personal loan (1%) round out the top nine uses for a tax return in 2024.
Megginson said savings accounts have been drained during the past year as households struggle to cope with rising interest rates and the cost of living.
"Millions have had to dip into their emergency funds to keep up with bills.
"A tax return of a few thousand dollars can be a huge boost to help you catch up financially."
Megginson urged Aussies to think carefully about how they can make the most of their tax time refund.
"After a couple of years of having to keep the purse strings tight, it can be tempting to splash out and splurge on little luxuries.
"But if used wisely, that money will give cash-strapped families a leg up.
"Finding ways to use that money to build wealth through investments or superannuation could lead to it being worth much more to you in the future."
| How will you primarily use your tax return/refund? | |
|---|---|
| Put it in savings | 47% |
| Use it to pay household bills | 23% |
| Put it towards paying off my mortgage | 9% |
| Use it on a holiday | 8% |
| Pay off my credit card | 4% |
| Go shopping | 4% |
| Invest in shares | 2% |
| Pay off my buy now pay later debt | 1% |
| Pay off my personal loan | 1% |
| Other | 2% |
| Source: Finder survey of 465 respondents expecting a tax refund, May 2024 |
Methodology
- Finder's Consumer Sentiment Tracker is a monthly recurring nationally representative survey of more than 60,000 respondents.
- Figures in this release are based on 1,012 respondents from May 2024, 465 of whom are expecting a tax refund.
- The Consumer Sentiment Tracker is owned by Finder and operated by Qualtrics, an SAP company.
- The survey has been running monthly since May 2019.
Check out Finder's guide on how to do your taxes this financial year.