Savings a bit of a challenge for UAE expats
BETTER LIFESTYLES IN THE UAE ALSO MEAN THAT RESIDENTS FOREGO THE CHANCE TO SAVE
Many struggle to put away money each month, or they simply don’t save at all, meaning they jeopardise the ability to save as much as Dh330,500, if they save Dh5,000 per month with a return of 5% for 5 years |
Despite multiple factors conducive to saving, expats in the UAE struggle to put away money each month, or they simply don’t save at all, according to wealth managers.
This would mean they jeopardise the ability to save as much as Dh330,500, if they save Dh5,000 per month with a return of 5 per cent for five years, according to Guardian Wealth Management.
“Living and working in the UAE allows people to live a certain lifestyle and unfortunately, savings can often be forgotten about,” Gemma Frankland, head of Global Partners at Guardian Wealth Management said.
“If you are here on a fixedterm contract, or only plan on staying for a few years before returning home, possibly to a lower salary, it is important to use your time in the UAE to save as much as you can for the future by putting money into a suitable savings plan,” she said.
A recent survey conducted by National Bonds revealed a majority number of those surveyed — about 85 per cent of UAE residents — believe they are not saving enough for their future. This compares with 89 per cent in 2016. They all understand the importance of savings and of doing it early.
“The earlier people start saving the better. For your longterm goals such as retirement, you should try to put away 2030 per cent of your monthly salary,” Gemma said. “If you do that from a young age, you’ll be in a great position. However, most people do not, and they tend to be in their thirties or forties before they start saving seriously,” she added.
The National Bonds survey revealed that more than 66 per cent of those surveyed feel that savings is important.
About 77 per cent of UAE respondents believe savings are important, compared to 63 per cent in other GCC countries and 56 per cent in Saudi Arabia.
Nearly 60 per cent of those surveyed cited “making their families happier” is the main reason to save for future. About 67 per cent of savers in the region aim to increase their savings in the next six months.
“You can begin by putting away as little as $200 (Dh735) per month. Also, apportioning any pay rise into your savings is a great way to boost your finances instead of simply increasing your expenses,” she said.
In a retirement survey, Schroders pointed out that retirees globally — on average — receive 61 per cent of their final salary annually. The contrast is greatest in Asia, with retirees getting 59 per cent of their final salary, while people approaching retirement are expecting 76 per cent.
The gap was smallest for Europe, with retirees receiving 63 per cent of their final salary, compared to an expectation of needing 72 per cent among those close to retirement. “There is no magic wand for people. To avoid facing challenging financial circumstances on retirement, they need to recognise the need to start saving as much and as early as possible,” Lesley-Ann Morgan, global head of Retirement, Schroders, said in July. “Perhaps, as a result of not having enough at retirement, our study showed that retirees were continuing to invest, and this often represented a larger amount than they expected before retirement,” she added.
The earlier people start saving the better. For your long-term goals such as retirement, you should try to put away 20-30 per cent of your monthly salary. If you do that from a young age, you’ll be in a great position.” Gemma Frankland | Head of Global Partners at Guardian Wealth Management