NRF: Americans Plan to Save Tax Refunds

(IDEX Online News) – In what could be bad news for retailers, a report from the National Retail Federation says that Americans are planning to save their tax refunds this year rather than pumping the money back into the economy.

According to the annual Tax Returns Survey conducted by Prosper Insights and Analytics, 47 percent of those expecting a refund plan to put the money into savings, the highest percentage in the survey’s history. Nearly two-thirds (65.7%) of those surveyed are expecting a refund.

“Americans are thinking of the future, and remaining financially secure is a big part of that,” NRF president and CEO Matthew Shay said. “A check from Uncle Sam gives consumers the ability to pay down debt, add a cushion to their savings or splurge on a vacation or big-ticket item.”

Just over thirty-nine percent said they would use their refund to pay down debt, with 25.1 percent planning to use it for daily expenses. Thirteen percent are planning to use it for a vacation and 10.5 percent plan to spend on a major purchase such as a television or car.

The survey notes that 54.9 percent plan of young adults plan to put their money into savings. However, 32.2 percent will spend it on everyday expenses and 15.4 percent will make a major purchase.

“Perhaps having learned a few financial lessons from their parents during the economic downturn, it appears that Millennials are looking for ways to get ahead,” Prosper Consumer Insights director Pam Goodfellow said. “Less likely to be saddled with mortgages and accumulated debt, tax refunds represent the perfect opportunity for younger consumers to invest in their future.”