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With tax return season around the corner, a survey has revealed how borrowers intend on spending their cash boost.
A survey conducted by Finder of 1,012 respondents (465 of whom are expecting a tax refund) has found that one in 10 (9 per cent) plan on putting the extra cash towards paying off their mortgage as interest rates remain high.
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The majority of respondents (47 per cent) indicated plans to bolster their bank account, with 23 per cent using the extra money to pay for household bills as insurance and electricity expenses continue to climb.
Meanwhile, around 4 per cent said they would use the funds to pay off their credit card, while 1 per cent said they would pay off buy now, pay later (BNPL) debts and an additional 1 per cent said it would go towards paying off a personal loan.
Personal finance expert at Finder, Sarah Megginson, said Australians are putting necessities first before luxuries this tax season.
“Aussies are fed up with barely scraping by and are looking to their tax return to provide a bit of financial relief,” Megginson said.
“Many are struggling with debt and a significant proportion of people plan to reduce that burden with their tax time cash injection.
“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.”
She further called on those expecting a tax return to “think carefully” about making the most of the 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,” she said.
“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.”
A previous survey found that 12 per cent of home owners have missed one or more repayments over the past six months.
According to Finder, this equated to an estimated 396,000 borrowers falling behind on mortgage repayments over this period, with 4 per cent of mortgage holders (132,000 households) indicating that they’ve missed at least one repayment.
Additionally, 8 per cent of mortgage holders said they did not meet multiple repayments, with 3 per cent stating that they requested a repayment holiday or applied for hardship assistance from their bank or lender.
[RELATED: 1 in 8 mortgage holders have missed repayments: Survey]
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