Retailers and suppliers, including those in the housewares sector, are going to need to work hard to get a share of middle-income consumer’s income tax returns this year as plans for those funds don’t include spending, a survey from financial services provider Primerica indicates.
In its Middle-Income Financial Security Monitor survey for the first quarter of 2023, Primerica found that respondents who expect a refund plan to use the money to pay bills, at 37%, pay down debt, at 34%, or add to their savings account, at 33%. The other 1% said they would put the money into a retirement account.
A substantial proportion of consumers do expect to spend on housewares and home furnishings products this year as demonstrated by the HomePage News 2023 Consumer Outlook Report, but, given the uncertain economic environment, it seems that promotional activity at retail will be needed to prime the spending pump.
In the survey, 60% of respondents from middle-income families expected to receive a tax refund this year. The largest segment of respondents, at 36%, anticipate their refund will be less than last year, while one-third believe they will receive about the same amount and 24% expect to receive more. Among the 30% of respondents who expect to owe taxes, 81% do not anticipate they will have problems paying or need to go on a payment plan to do so.
“Primerica’s survey finds that most households were thoughtful in their financial planning so that they did not owe taxes at filing time, a sometimes painful surprise,” said Amy Crews Cutts, economic consultant to Primerica, in announcing the survey results. “The findings also show that nearly all of middle-income households who anticipate a refund are thinking about their financial security as they plan to apply refunds to reducing debt, paying bills, or add to their savings.”