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29 March 2024

83% of residents say future is not financially secure

83% of residents say future is not secured financially. (FILE)

Published
By Waheed Abbas

A large number of people in the UAE - 74 per cent - are failing to save on a regular basis. Most of most of them are Arab expatriates and UAE nationals while only Westerners tend to save regularly, according to a new research.

A survey by National Bonds Corp conducted in conjunction with market research firm YouGov Siraj, found that only 26 per cent of UAE residents save regularly.

The survey also found that one in four UAE nationals do not save at all for retirement, children education or any other future needs.

Bitten by financial crisis, nearly half the respondents claim their savings have declined since 2009, with just 24 per cent reporting an increment and 27 per cent expressing no change. Emiratis and Westerners admit that their savings in 2010 are better off than in 2009.

The numbers became more worrisome when respondents were asked about whether they have adequate savings for future. Approximately 83 per cent of respondents believe that their future is not secured financial and only 14 per cent are satisfied with their savings.  But nearly 70 per cent of people's savings did not go as they had planned.

The survey also revealed that Westerners tend to save more regularly, followed by Asians, Emiratis and other Arab nationals.

Due to financial crisis, people in the UAE - particularly Emiratis - believe that this is high time to embark on savings. Around 42 per cent of UAE nationals say it's good time to save, followed by Arab expatriates at 33 per cent.

The results of the survey - first of its kind in the region - showed that 48 per cent of respondents say that financial status for the next six months is stable and 17 per cent believe otherwise.

With regard to increase in income over the next one year, it said that almost half of respondents expect a rise while nine per cent seeing drop in decrease. Around 36 per cent anticipate no change in their income in the coming 12 months.

It said nationalities show different preferences for savings instruments. While Emiratis and Arab expats primarily choose savings accounts and bonds, Asians and Westerners appear to have a broader saving portfolio that includes fixed/time deposits and schemes linked to prizes and insurance.

The UAE is ranked well below when compared to other countries around the world - such as 45 per cent of UK population saves regularly for future needs.

Interestingly, around 44 per cent of Emiratis claim to have savings outside the UAE, identifying savings accounts as the most used instrument. The reverse is seen amongst Arab expats, with 70 per cent claiming to not save outside the UAE, driven by the fact that some Arab countries - beyond the Gulf - do not offer stable economies which create distrust amongst their citizens.

On the other hand, a large majority of Asians and Westerners prefer their home countries for depositing their savings.