UAE men dip more into savings than women

A third of men (31%) across the UAE would consider dipping into their retirement funds to cope with tough times as a result of unforeseen life events compared to less than a quarter of women (21%), according to a recent HSBC study.

The Future of Retirement: A new reality, a survey of over 15,000 consumers in 15 markets and more than one thousand people in the UAE, found a significant appetite among savers to dip into retirement savings when faced with financial hardship.  However, it also found that 50% of people in the UAE are not regular savers, leaving many with no option but to resort to more extreme measures when they are financially constrained.

Moving to a smaller house was among the alternative coping mechanisms according to the report, which also revealed another gender contrast.  The study found that more than one in five women (22%) would consider downsizing to deal with financial difficulty, compared to just 16% of men.

The study showed the financial strain that home ownership is placing on today’s savers, with nearly 45% saying that buying a home or paying a mortgage has had a significant impact on their ability to save for retirement.

Bricks and mortar is just one of the sacrifices people would consider making if their financial situation demanded it; 24% of respondents said they would consider selling their valuables if they needed the money. There was also a significant difference here between respondents as over 30% of females would be willing to consider this step in times of financial difficulties, whereas, only 20% of males would think about this move.

Others would consider borrowing to avoid parting with their assets; 12% would borrow money and 14% would ask friends and family for help. Women are also more willing to react proactively to dealing with unforeseen financial hardships, as nearly 40% would look for better paid work during these trying times, while only 28% of men would consider the same move.

Gifford Nakajima, Regional Head of Wealth Development, HSBC Bank Middle East Limited, said: “Women appear to be more concerned about maintaining their retirement savings compared to men in the UAE and seem to be less likely to dip into this fund when they are financially constrained. It is also interesting to note that men are less proactive when coping with unforeseen circumstances; however this attitude can grow to be a significant problem as it will put more pressure on them in the future.”

The importance to starting early to plan for retirement is underscored in another study by HSBC, in which nearly half of retired people (46%) globally believe that they have not achieved their hopes and aspirations for retirement because they have less money to live on than they expected. The second report in the Future of Retirement series: Life after work, looks at the sentiments of people in retirement and shows that nearly two fifths (38%) of retired people globally have not prepared adequately for this phase of their lives.

Nearly one in eight current workers of the people surveyed don’t expect to retire completely and people’s expectations of a work-free retirement drop significantly as they enter old age. Almost 17% of 55 to 64 year olds expect to work indefinitely - nearly a double of the 10% of 25 to 34 year olds who expect to do so.

Nakajima added: “While these differences between the financial planning habits of men and women are surprising, the predominant lack of saving plans across the UAE is troubling. Although erratic saving habits are understandable given the unstable economic environment over the past few years, it is essential that both men and women significantly alter their current habits and adopt a more formal attitude towards financial planning. This is especially important if they do not want to continue working indefinitely and retire comfortably.

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