Big savings plans for tax cut cash

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  • Australians are planning to save – rather than splurge – extra money from their stage 3 tax cut
  • Gen Z, women and those earning between $100,000 and $150,000 most likely to save
  • Australians aiming to create savings buffers of $17,000, mainly for holidays or a rainy-day fund

More than a third of Australians are planning to stash extra money from the upcoming stage 3 tax cuts into high interest savings accounts, while almost 3 in 10 think it will be useful to offset the higher cost of living.

Coming into effect from 1 July, the stage 3 tax cuts will see Australians pocket between $350 and $4,500 extra annually and come at a time when household financial stress has reached its highest point in eight years.

New NAB data shows how Australians will respond:

  • More than a third (36%) plan to save extra money from their stage 3 tax cuts, including more Gen Zs (53%), those earning between $100,000 and $150,000 (49%) and women (39%).
  • People also plan to spend their tax cuts on offsetting the higher cost of living (29%), paying down debt (22%) and investing (12%), while just 8% say they’ll splurge it on non-essentials.
  • Almost 8 in 10 (77%) say they’re trying to save more money and, on average, they’re looking to create around $17,000 worth of savings.
  • 1 in 3 are saving for a holiday or a rainy-day fund, 1 in 4 for a home and 1 in 5 for retirement.

NAB Personal Banking Executive Paul Riley said Australians’ savings topped the list for tax cut cash.

“Despite cost-of-living pressures, Australians have been prioritising their savings wherever possible over the last year or so. The money people expect to get back from stage 3 tax cuts will help supercharge their savings or rainy-day funds,” Mr Riley said.

Three quarters of NAB deposit and savings accounts are now opened digitally and household deposits have grown by 6.4% over the last year.

“High interest savings accounts can be a safe, smart and stable way to manage your money, providing ready access to funds if they’re needed, as well as a rewarding interest rate.

“Many Australians are also keen to use the money from these tax cuts to give their household budgets, which are under pressure from the cost-of-living crunch, some much-needed breathing room.

“Fewer Australians are planning to splurge their tax cuts, which is welcome news in the fight against inflation.

“Australians continue to prove they’re more engaged with their finances than they have been for a long time, and it’s clear most are going to use this extra money to get ahead.”

 

Extra information:

  • Data sourced from NAB Australian Wellbeing Survey Q1 of more than 2,000 Australians.
  • Estimated annual tax savings from Stage 3 Tax Cuts:
Under $35,000 $35,000 – $50,000 $50,000 – $75,000 $75,000 – $100,000 $100,000 – $150,000 $150,000 – $200,000 Over $200,00
$350 $750 $1,200 $1,900 $3,000 $4,000 $4,500

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