Albertans split on how to spend tax refund: ATB survey

EDMONTON, April 6, 2016 /CNW/ - More than half of Albertans (52 per cent) expect a tax refund this year, according to the latest ATB Investor Beat, which surveyed 1,004 Albertans from January 4-13, 2016. Those in the 18-34 and 35-54 age ranges are more likely to expect refunds, while more Albertans 55 and older expect to send cheques to Ottawa.

Among those who anticipate a refund, 38 per cent said they would use the cash to pay down debt while 37 per cent said they would put it into savings or investments, which lines up with Albertans' top financial goals.

"What you do with your tax refund really depends on your unique situation," said Chris Turchansky, President of ATB Investor Services. "With interest rates as low as they are, it might make sense delaying paying off debt if you can. If saving is more of a priority, where you put your money depends on what you're saving for. If you have a short-term savings goal, such as buying a car or renovating your kitchen, a tax-free savings account (TFSA) is a great tax-efficient option. If you're saving for retirement, either an RRSP or TFSA could work, depending on your own circumstances. Your financial advisor can help."

The decision on how to spend tax refunds is taking place against the bigger background of saving itself. According to Investor Beat, many Albertans are continuing to turn their focus away from saving for retirement and instead putting more effort into managing their day-to-day finances and paying down debt.

Forty-five per cent of Albertans surveyed listed 'paying down debt' as one of their top financial goals, up seven per cent from October 2015. 'Saving for retirement' remains the most popular financial goal for Albertans. However, the number of respondents choosing 'saving for retirement' has dropped to 46 per cent, down five per cent from the previous survey.

More than half of Albertans who have retirement as a goal (52 per cent) noted they are behind on their retirement goals. While cost of living and unexpected expenses are the main reasons many Albertans struggle to keep up, job loss was cited significantly more than in the previous Investor Beat survey (up seven per cent), in particular among millennials and gen-Xers. Both millennials and gen-Xers were twice as likely to be affected by job loss than those 55 and over.

"If you've been affected by the economic downturn, it's important to focus on day-to-day expenses, but at the same time, you shouldn't completely abandon your long-term savings goals," said Turchansky. "If it's at all possible, instead of not contributing to your retirement, consider reducing your contributions until things pick up. And if you haven't yet been impacted by the downturn, now's the time to build your emergency savings, just in case."

Overall, among those surveyed, 48 per cent said they've been personally impacted by the drop in oil prices and many have reduced spending as a result. More women (75 per cent) than men (63 per cent) who have been affected have cut their spending.

For the complete Investor Beat survey results, click here.

ATB Securities Inc. (Member: Canadian Investor Protection Fund; Member: Investment Industry Regulatory Organization of Canada) and ATB Investment Management Inc. are wholly-owned subsidiaries of ATB Financial and authorized user of the trade name ATB Investor Services. ATB Investor Services is a registered trademark of Alberta Treasury Branches.

SOURCE ATB Financial

or interview requests, please contact: Barry Strader, Corporate Reporter, ATB Financial, 780-495-1343 (office), 780-886-4398 (mobile), [email protected]