Aussies set to add an extra $17 billion to their savings this tax season

• • • • Over one in three Aussies (38%) will put their tax into savings
      • Almost half will spend their tax return on bills or paying down debt
      • Tax time tips

1 July 2020, Sydney, Australia – Most Australians will be cautiously using their tax returns this year as they look to strengthen their financial position coming out of COVID-19, according to new research by Finder, Australia's most visited comparison site.

A recent Finder survey of 1,008 respondents revealed that 38% of Aussies – equivalent to 7.3 million people – plan to put their tax return straight in the bank this year.

Based on the average tax refund in 2019 of $2,381, Finder estimates Aussies will be growing their collective savings by a whopping $17.4 billion this tax season.

COVID-19 has put extreme financial pressure on many households. According to Finder's Consumer Sentiment Tracker, a nationally representative study of 8,849 respondents, 8.3 million Australians are living pay-to-pay.

Kate Browne, personal finance expert at Finder says a tax refund could be the helping hand that some Australians need 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.

"Many people are uneasy about what's in store over the next 12 months, so financial security is understandably a big priority.

"In years gone by, many Aussies might indulge in a spot of retail therapy or purchase big-ticket items at tax time, but things are very different this year."

The research also shows that 43% will be putting their tax towards paying off debt.

This is made up of one in ten (12%) Aussies who will use the extra funds to pay down their mortgage, and a further 12% who will use the cash influx to cover household bills.

Almost one in five (19%) will be using their return to pay off their HECS debt, credit card or personal loan.

A small portion of Aussies (9%) remain determined to have a holiday, while 8% plan to go shopping with their return.

Browne said households should use their tax return as a chance to get ahead financially.

"If you receive a sizable return this year, use it wisely. Bulk up your emergency fund, pay off debt or get your bills back on track.

"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."

Generation Z are the biggest savers, with more than half (58%) planning to stash their refund. Meanwhile, just 21% of baby boomers plan to do the same.

Men (16%) are almost twice as likely as women (9%) to put their tax return towards paying off their mortgage.

"The Finder app can also help to boost your savings by analysing your spending so you can see where you might be able to cut back.

"It gives users clever tips, alerts and insights around spending and most importantly saving. With the country now in a recession, every bit helps," Browne said.

Source: Finder June survey 2020

Tax time tips

• • Consider an accountant. If you're unsure whether you can claim on something or your finances are a little complex, work with an accountant to ensure your return is lodged correctly.
  • Lodge on time. If you're doing your own return, you need to lodge before 31 October. If you don't, and you owe the ATO money, you may be faced with a penalty.
  • But not too early. On the flip side, many Aussies are probably looking to lodge as soon as possible but don't tackle your tax return as soon as 1 July comes around. Lodging too early means you might miss important information and lodge an incomplete return.
  • Keep your receipts. You need to keep a clear financial record of anything you want to claim on. Without these documents, there's no proof of purchase and you might be unable to get any money back.