Tax Survey Finds More Consumers Will Save Their Refund

The savings from the recently passed federal tax relief bill won’t necessarily turn into retail sales this year.

According to an annual tax-refund survey by the National Retail Federation and Prosper Insights & Analytics, 49 percent of those getting a tax refund will place that money into their savings accounts. It’s the highest level in the 12-year history of the survey. In the 2017 tax-refund survey, 48 percent said that they intended to save their tax refunds.

Matthew Shay, NRF’s president and chief executive officer, said that consumers are being pulled in many directions. “With the passage of tax reform and the expectation of more disposable income, we expect to see consumers prioritizing how and when they spend their hard-earned dollars, especially during the back-to-school and holiday seasons.”

For those spending their refund money, 22 percent will finance “everyday expenses.” About 12 percent will use their money for a vacation; 10 percent will use it for dining out, spa trips or for shopping for fashion; 9 percent will spend for home improvements; and 8 percent will use refunds to make purchases for appliances, furniture or cars. “Younger consumers are being more mindful about their hard-earned money, especially those 18 to 24 who have already filed their taxes this year, higher than any other age group,” said Prosper Executive Vice President of Strategy Phil Rist. “Although this group is focused on allocating a portion of their refunds to savings, they are also more likely to use them for everyday expenses compared with any other age group.”