How much and where do UAE residents save?

Previous reports have highlighted that a majority of UAE residents have some kind of a debt to repay, but a new report now reveal that residents in the country are saving after all.

A large percentage of UAE residents surveyed by a UAE-based comparison website said they do save about 10 to 50 per cent of their income each month – but, importantly, they are not saving this amount in the UAE.

For most of them, the option is to remit money to bank accounts outside of their country of residence as they are more conversant with banking systems in their home countries.

“When you look at the results, a significant number, or 65.5 per cent, of the survey respondents claimed to be saving between 10 and more than 50 per cent of their salary every month. With millions of dirhams leaving the country every year, there appears to be huge potential for UAE banks to attract regular savers,” said Jon Richards, CEO of compareit4me.com, which carried out the survey.

Offshore banking is particularly becoming popular in this area and many expatriates prefer to put and invest their money in such accounts.

Despite a large number of residents sending money abroad, bank deposits in the country have also increased, signalling a new trend. UAE Central Bank data shows that total bank deposits of UAE banks are up 9.8 per cent this year (data available until July 2014), and stood at slightly more than Dh1.4 trillion ($381 billion).

Some reports, however, suggest that UAE residents do not have healthy financial habits and saving plans are totally missed in an upgrade culture. A previous survey by 999 Magazine showed that two out of every three expats in the UAE admit that they are not saving enough for their retirement.

The survey revealed that a large majority of UAE expats are postponing off this important task to meet their day-to-day financial responsibilities.

Another study by Zurich International Life showed that UAE residents are failing in their saving habits for important things like retirement.

 

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