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Expats in UAE struggle to save in spite of high salaries
| Published: | 17 Aug at 6 PM |
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In spite of paying no income tax and earning inflated salaries, expats working in the UAE are struggling to save.
During the average five years an expat spends working in the UAE on a non-taxed high salary, it would seem it’s possible to save a reasonable amount for the future. However, the majority are believed to have saved nothing and many say they’re struggling to support their luxury lifestyles, with little left over to save or invest. Others, of course, neglect the need to save and simply go on enjoying upscale expatriate life to the full.
Local financial advisers urge their clients to sign up to savings plans, but the news of recent disasters due to blatant mis-selling in many expat destinations may have discouraged UAE-based expatriates from taking chances with their hard-earned cash, especially if what’s offered is a plan lasting longer than the average of five-year contracts in the region. A recent survey revealed some 85 per cent of expat professionals resident in the UAE are fully aware they’re not putting enough by to cover the loss of a job or other lifestyle changes in the future.
According to the survey, just over half those polled intend to increase their savings in the near future, with the UAE hoping its new savings campaign will encourage expats to plan more carefully for their retirements. As well as a lack of trust in IFAs, there’s a lack of awareness and understanding of savings products and how they can provide stability in retirement. Another issue of concern for many is the high cost of medical treatment over and above the mandatory employment coverage.
Coincidentally, shopping until you drop seems to be falling out of favour in the Gulf States, with Saudi shoppers rejecting designer brands and going for less expensive alternatives. Another survey has revealed over half of its respondents are now actively looking for bargains, with Saudi consumers leading the trend as well as actually delaying purchases. Only a third of shoppers are sticking with hi-so brands and labels, and chain grocery stores as well as discount malls are seeing revenues escalate as a result.
During the average five years an expat spends working in the UAE on a non-taxed high salary, it would seem it’s possible to save a reasonable amount for the future. However, the majority are believed to have saved nothing and many say they’re struggling to support their luxury lifestyles, with little left over to save or invest. Others, of course, neglect the need to save and simply go on enjoying upscale expatriate life to the full.
Local financial advisers urge their clients to sign up to savings plans, but the news of recent disasters due to blatant mis-selling in many expat destinations may have discouraged UAE-based expatriates from taking chances with their hard-earned cash, especially if what’s offered is a plan lasting longer than the average of five-year contracts in the region. A recent survey revealed some 85 per cent of expat professionals resident in the UAE are fully aware they’re not putting enough by to cover the loss of a job or other lifestyle changes in the future.
According to the survey, just over half those polled intend to increase their savings in the near future, with the UAE hoping its new savings campaign will encourage expats to plan more carefully for their retirements. As well as a lack of trust in IFAs, there’s a lack of awareness and understanding of savings products and how they can provide stability in retirement. Another issue of concern for many is the high cost of medical treatment over and above the mandatory employment coverage.
Coincidentally, shopping until you drop seems to be falling out of favour in the Gulf States, with Saudi shoppers rejecting designer brands and going for less expensive alternatives. Another survey has revealed over half of its respondents are now actively looking for bargains, with Saudi consumers leading the trend as well as actually delaying purchases. Only a third of shoppers are sticking with hi-so brands and labels, and chain grocery stores as well as discount malls are seeing revenues escalate as a result.
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