Revealed: Which nationality in UAE is most (and least) ready to retire

Moving on from work life to retirement may sound like a dream, but reality is that while expenses remain (almost) the same, there is no paycheque coming home every month.

It’s important and something that all financial experts say time and again – we need to be prepared and start early on during our career to save for the retirement pot that will be critical when we do stop coming to work.

How many of us, however, are today ready for retirement or even close to it?

A new survey by Zurich International Life found out that only about half (56 per cent) of UAE residents have a retirement plan; either a personal or company pension.

In terms of which nationality is the most and least prepared to foot post-retirement bills, it’s Western expats that are most likely to have a retirement plan (68 per cent) while Arab expats are least likely to have one (50 per cent).

Many if not most of us, it would seem, fail to save diligently despite being aware of the need for retirement planning, and only wake up to the reality of a retired life after 40 when we see it in our greying hair.

And, this is very obvious in the lives of most who reside in the UAE. According to the Zurich study, retirement aspirations of many residents in the country are under threat due to a lack of retirement planning.

The survey, which was conducted by YouGov, shows that 46 per cent of the residents hope to retire before the age of 60 and 36 per cent expect to live in retirement between 10 and 20 years with another 39 per cent expecting to be retired for over 20 years.

But the desire to stop working earlier does not match with the financial planning that it requires.

The research reveals that 63 per cent of respondents are not confident they are saving enough for retirement; this figure rises to 75 per cent for Arab expats who are the most concerned about their pension provision and is lowest among Western expats (52 per cent).

 A previous report by HSBC also pointed in the same direction. The bank’s global retirement report earlier this year showed the UAE has the highest proportion of people globally (55 per cent) that feel unprepared for retirement because they didn’t start saving early enough.

The Zurich research points to an imbalance between retirement aspirations and the likely reality among many UAE residents. It also finds 81 per cent of respondents are looking to their employers to help them financially prepare for retirement, which may not happen in many cases.

The report also highlights the over reliance on property to fund retirement savings, which can be skewed at times.

Nearly one-third of UAE residents (31 per cent) plan to rely on property as their main source of retirement income.

Western expats (35 per cent) and Asian expats (33 per cent) are most likely to be reliant on property. Emiratis are least likely to require income from their property (25 per cent) and are the only nationality not to state property as their main source of retirement income.

Government pension was ranked first (40 per cent) by them.

“An over-reliance on property as the main source of retirement income is a risky approach as people will always need a roof over their heads.

Even if the retirement income is derived from a second home, selling a property, particularly during a downturn, can be difficult. This makes property a very illiquid asset,” reads the report.

Across all respondents, almost one-in-five (18 per cent) said a government pension will be their main source of retirement income; 17 per cent will rely on savings in the bank and 8 per cent hope their inheritance or other financial support from their families will support them through retirement.

Only a quarter will use a personal pension (17 per cent) or company pension (10 per cent) as their main retirement funding method, reveals the survey findings.

 (Image via Shutterstock)

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