UAE residents among least savers in Gulf

The UAE residents are the among worst savers in the Gulf region, according to the results of the National Bonds GCC Savings Index.

Residents of Qatar scored the highest in terms of saving environment and savings potential, while residents of Kuwait and Saudi Arabia scored the lowest in terms of savings, according to the results of the National Bonds GCC Savings Index. 

The results of the index, which convert respondents’ attitudes into a base value that can be used to compare countries and benchmark against in the future, showed that Oman fared highest in terms of financial stability of respondents. The Sultanate also scored highly on savings environment and savings potential, while Bahrain savings environment scored in line with the overall GCC average and scored well when it came to savings potential.

The survey covered 1,183 residents of Saudi Arabia, Qatar, Bahrain, Kuwait and Oman, gathering insight into their attitudes towards the current savings environment, their own savings potential and their outlook on the future.

Three quarters of those surveyed declared that their current savings are not as much as they had planned and they do not save regularly, while a further 93 per cent were of the opinion that their savings are inadequate for their future needs. Residents of Saudi Arabia had a more negative outlook on their savings environment, with 49 per cent declaring that now is not a good time to save, almost double the UAE (27 per cent) and higher than the GCC average of 41 per cent.

Residents of Qatar showed the biggest commitment to regularly setting aside money, recording the highest instance of regular saving with 41 per cent, while at the other end of the scale Saudi Arabia had the lowest occurrence of regular saving with just 23 per cent. The statistics also showed that although 95 per cent of respondents acknowledge that saving is important, only 26% of people in the GCC actually save regularly.

When questioned about the factors that affected their saving decisions, the biggest concern for respondents was that the saving instrument should be Sharia-compliant. The amount required to start saving was also a big factor followed by the reputation of the provider, and the protection of the capital.

Results showed that residents who had developed a habit of saving were -diligent, as 55 per cent of respondents who admitted to saving regularly outing aside around 20 per cent of their monthly income.

Surprisingly Those foreseeing their financial status to be stable in the near future (58 per cent) where more successful when it came to saving, compared to those who expect their income to increase (significantly/ to some extent) over the next 6 to 12 months.

Mohammed Qasim Al-Ali, Chief Executive Officer of National Bonds Corporation, said: “When we launched the first ever National Bonds Savings Index in September it sent shockwaves through the UAE, as people hadn’t realized the extent of negligence there was towards saving. We decided to expand our research to encompass the entire GCC to evaluate the saving sentiment in other countries, yet we have found that the same problems exist but with different scales in Saudi Arabia, Kuwait, Qatar, Oman and Bahrain. This research gave us more insight into why some countries were more resilient towards the crisis than others. “

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