More consumers said they plan on putting their tax refunds into savings. According to the National Retail Federation’s annual Tax Returns Survey conducted by Prosper Insights & Analytics, 49.2% of consumers expecting a refund plan to save the money rather than spending it right away, the highest percentage in the survey’s history.
All told, 65.5% of survey respondents said they expect a refund.
More young adults than ever plan to save their tax refunds, with 57.3% of 18 to 24 year-olds intending to bank their government issued checks. At the same time, 27.4% said they would use a tax refund for groceries, gas and other everyday purchases. Among 25 to 34 year olds, 52.3% said they would tuck their refunds into savings and 45% would use it to pay down debt.
Overall, of those consumers who expect a refund but don’t intend to save it, 34.9% said the plan to pay down debt and 22.4% would use the refunds for everyday expenses. Still some consumers have more indulgent spending ideas, with 11.4% planning to book a vacation, 9.2% planning to spend on major purchases like a television or car and 8.3% planning to indulge in a salon or spa service, or an elaborate night out. Among 18-24 year old consumers, 12.6% said they would spend on vacations and 13.4% on some sort of splurge.
“Consumers are building their spending power and boosting their confidence as they set aside their checks from Uncle Sam,” said Matthew Shay, NRF president and CEO. “Americans this year see refund season as a time to improve their financial health by using their refunds to get ahead on savings goals and plan for bigger purchases in the future. Money saved is money waiting to be spent.”