Australians are developing ‘healthier savings habits’ in response to increasing global uncertainty according to the fourth Bankwest Taxing Times Report.

 

The report revealed that 31 per cent of Australians expecting to receive a tax refund intend to save that money, while 39 per cent indicated their intention to use it to pay down existing debt.

 

The report found that the average expected tax refund across the country has fallen to $2,017 from $2,317 from last year, recording a 13 per cent decrease.

 

“While refund expectations have shrunk, the vast majority of the Australian workforce will use their tax return windfall with a clear focus on saving and reducing debt,” Bankwest Retail Chief Executive Vittoria Shortt said.

 

Over half of respondents (53%) who expect to receive a refund believe they will receive less than $1,000 and only 7% expect to receive a payment of more than $5,000.

 

“As the majority of tax payers are expecting a smaller refund than previous years, it is encouraging to see that they are managing their finances more carefully, and developing healthy savings habits while reducing existing debt levels,” said Ms Shortt.

 

“These results support the findings of the Bankwest Financial Fitness Index released in March, which found that half of all respondents had changed their spending habits over the year becoming more conservative.”

 

The report found that intention to save or pay down debt using the return is a common practice across generations.

 

Among those planning to save their tax refund, 69% nominated a bank savings account as their savings vehicle of choice, a significant increase on the 57% recorded last year.

 

“Australians are choosing bank savings accounts to protect and grow their hard-earned cash and we encourage consumers to shop around for the best account to suit their needs,” said Ms Shortt.