For at least the past ten years, I have heard volunteers saying “taxpayers have no interest in savings products taxpayers only want tax preparation” and those championing savings products saying that “engaging taxpayer in savings is really a matter of getting buy-in from the volunteers”. I believe that both statements are describing an aspect of the truth about recent savings interventions and missing the larger picture where taxpayers served by VITA are saving and entering financial mainstream.

There is ample evidence that VITA clients’ propensity to save their refund is increasing.  In 2015, 55% of taxpayers served by VITA direct deposited into a checking or savings account up from about 40% in 2008, a 38% increase during the great recession.  VITA taxpayers direct deposit rates are approaching that of all taxpayer 62%.   Note that about 17% of VITA taxpayer have a balanced due which would preclude direct deposits and many others have refunds intercepted for debts, so less than 28% are choosing not to deposit refunds into a bank.

So why do volunteers and others think our taxpayers don’t save? I think primarily we are convinced by anecdotal information that many individuals who direct deposit save for a short period, are in debt and desperate for refunds by next filing season.  Research that shows how refunds are used and how long refunds are retained that confirm are beliefs are scant. A secondary reason is recent savings initiatives offering around savings bonds and split refunds have shown no significant up take less than 1% of taxpayers choose either and the most successful sites that put significant energy and resources into promoting split refunds and savings bonds have uptake of less than 5%.

So here is where we stand now: 1) Most VITA taxpayers save even if only for the short term and VITA has had significant impact increasing the use of mainstream banking products. 2)  Current initiatives to increase saving for the longer term do not appear to be working. 3) There is a significant need for research into longer term savings of VITA taxpayers how well are the saving and what are the barriers and challenges.