Why UAE residents do not save
Several surveys repeatedly indicate that despite making more money in a tax-free environment, UAE residents just don’t save enough.
According to HSBC Expat Explorer Survey, expats working in the UAE earn an average salary of approximately Dh38,000 per month, stacking them in the high-income bracket when compared to professionals elsewhere.
A report by ECA International, a consulting firm that provides data and software solutions to assist companies in the management of international assignees around the world, ranks UAE on top of countries that afford far more generous salaries than other expat destinations around the world.
This should, in principle, mean that UAE employees save a whole lot of money every month.
However, this isn’t the case.
A majority of UAE residents are failing to put money aside. The latest one to suggest this is a survey by a finance comparison site.
The findings of compareit4me.com reveals that majority of UAE residents still struggle to save, with more than half of respondents (53 per cent) saying they don’t think they earn enough money to allow for them to allocate any to savings.
Findings of the survey indicate that less than half of UAE residents set aside funds from their monthly wage for retirement or emergencies.
What is shocking is that over 30 per cent do not save a single dirham, with over 13 per cent say they believe life is too short to save.
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 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.
“It’s easy to put off saving especially in your younger years, but before you know it, another year has passed and you still haven't put your saving plan into action.
“There are a wide range of investment opportunities available to expats,” said Sonja Stephen, Editor at compareit4me group.
“For example, offshore banking is a great way to keep track of your finances, while enjoying the security and comfort of having your money in a highly regulated environment.”
She added: “It hasn’t always been the case, but savers in the UAE can now earn higher returns on their money.
“The majority of the UAE banks are now offering attractive savings and fixed deposit accounts too.”
Most people attribute financial insecurities to a lack of income and list loans and credit card debt among their biggest concerns.
“Along with good credit card management, making payments in full and on time, both factors which are essential to avoid debt, it’s smart to focus on a savings plan,” Stephen added.
“Individuals should tailor a realistic savings plan to suit them and should take positive steps to achieve their goal. Increasing emergency savings, signing up for a good pensions plan and even investing are all key areas that should never be overlooked.”
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