More Young Adults Using Tax Refunds for Savings

For Immediate Release
Contact: Scott Krugman or Kathy Grannis (202) 783-7971
Note to media: Click here  for sample charts from this survey as well as complete results by age, gender, and region of the country.
Email: krugmans@nrf.com or grannisk@nrf.com

More Young Adults Using Tax Refunds for Savings, According to NRF
--More than 150 million consumers expecting refund this year--

Washington, DC, March 21, 2006 – In anticipation of receiving a generous refund from Uncle Sam, many consumers are filing their income taxes early this year. The National Retail Federation's (NRF) 2006 Tax Returns Consumer Intentions and Actions Survey, conducted by BIGresearch for NRF, found that only one-in-seven consumers (14.1 %) plan to wait until April to file their taxes. Nearly two-thirds of consumers (65.8%) filed their income taxes this past January and February, with an additional one-in-five (20%) filing in March. According to the survey, 67.9 percent (151.38 million people) of consumers expect to receive a tax refund this year.*

“Many consumers look forward to tax season, when they know that the government will be padding their pockets with a little extra cash,” said NRF President and CEO Tracy Mullin. “Retailers begin to offer special sales and promotions in early April in anticipation of consumers hitting the stores with extra money in their wallets.”

Paying down debt remains a high priority for most, with nearly half of those who expect a tax refund planning to use the check towards debt (46.7%). More than one-third (35.2%) anticipate putting some of the money into savings, while one-in-four (25.7%) will put the money toward everyday expenses. (The sum of the % totals is greater than 100% because the respondents can select more than one answer.)

This year significantly fewer young adults will be using their tax refund to pay off debt (30.9% vs. 59.6%), while close to half (43.8%) will be putting their refund check into savings.

“Whether they are building up their finances or saving for a rainy day, this year the 18-24 year-olds are choosing to allocate the extra money from their tax refunds to their savings,” said Phil Rist, Vice President of Strategy for BIGresearch. “As a result we are seeing fewer young adults use their tax refunds to pay off a portion of their debt.”

Yet not everyone is able to resist the temptation of spending the extra money. According to the survey, one-in-ten consumers will dedicate a portion of their return to major purchases (10.9%) or a vacation (11.7%).

The Internal Revenue Service has announced that the average tax return as of March 10 was $2,423.  For more information on tax returns to date, click here.

About the Survey
The NRF 2006 Tax Returns Consumer Intentions and Actions Survey, conducted for NRF by BIGresearch, was designed to gauge consumer behavior and shopping trends related to tax returns. The poll of 7,209 consumers was conducted from February 1-8. The consumer poll has a margin of error of plus or minus 1.0 percent.

BIGresearch is a consumer market intelligence firm that provides unique consumer insights that are gathered online utilizing very large sample sizes. BIGresearch's syndicated Consumer Intentions and Actions survey monitors the pulse of more than 7,000 consumers each month to empower its clients with unique insights for identifying opportunities in a fragmented and changing marketplace.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet and independent stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees - about one in five American workers - and 2004 sales of $4.1 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

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*The tax returns estimate reflects the approximate number of people who will be filing taxes. However, since many people file joint tax returns, the number does not estimate the number of tax returns.

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