New research suggests Australians expecting a tax refund this year are far more likely to save the money or cover household expenses than splash out, reflecting ongoing pressure on family budgets.

For many Australians, receiving a tax refund once meant a chance to book a holiday or indulging in something special, but this year the picture looks very different with new research from comparison site Finder suggests Australians expecting money back from the Australian Taxation Office are overwhelmingly planning to use it to strengthen their finances rather than treat themselves, highlighting the ongoing impact of higher living costs.

Finder’s survey found 38 per cent of Australians expect a tax refund this financial year. Of those, 58 per cent say they plan to put the money straight into savings, making it by far the most common use for the extra cash.

Another 14 per cent intend to use their refund to pay household bills, while 6 per cent will put it towards their mortgage. The same proportion plans to spend the money on a holiday.

Richard Whitten, money expert at Finder, said many households are viewing their refund as a chance to regain some financial breathing room rather than an excuse to spend.

“Many Aussies are feeling the squeeze and are counting on their tax refund to get back some breathing room,” he said. “Whether it’s topping up savings, covering bills or chipping away at debt, most people are prioritising financial security over treating themselves.”

The research paints a picture of Australians still feeling the effects of rising everyday costs, from groceries and electricity to insurance and housing expenses.

Only a small proportion of respondents said they planned to use their refund on discretionary spending. Four per cent intend to go shopping, another 4 per cent will pay off their credit card, while 3 per cent plan to invest in shares. Smaller numbers will put the money towards buy now, pay later debt or personal loans.

Not everyone is expecting good news from the tax office. Finder found 15 per cent believe they will receive a tax bill this year, while one in four Australians are still unsure whether they will receive a refund or owe money.

For households continuing to keep a close eye on their budgets, this year’s tax refund appears less like a bonus and more like another opportunity to build a little extra financial security.

The trend could also have wider implications for Australia’s small and medium businesses. When households choose to save unexpected cash or put it towards bills and debt instead of discretionary spending, cafes, retailers, tourism operators and other local businesses can miss out on the boost they often hope tax refund season will bring. For many small businesses already grappling with higher operating costs and cautious consumer spending, another subdued tax time could make trading conditions even tougher.