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Reasons why expats in the UAE aren’t making financial plans for retirement
| Published: | 26 Feb at 6 PM |
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Expats in the UAE are being urged to take retirement finance seriously.
A recent survey revealed almost half of all expats living and working in the UAE are either planning to keep working after their official retirement age or haven’t given a thought to their post-retirement standards of living. Additionally, 60 per cent had an almost total lack of financial awareness as regards long-term savings plans, with 43 per cent believing end of service benefits would take care of their post-retirement needs on a long-term basis.
Given that retirement needs are normally based on expectations as well as anticipated life spans and lifestyles, the majority of expats who’ve not made preparations for the last stage of their lives could well be forgiven for their lack of preparedness. End of service benefits in the UAE aren’t exactly generous as regards the average expat position, with 25 years’ service getting just two years of the basic salary received – hardly enough to support a less-than frugal lifestyle until the inevitable occurs.
Another reason why many expats aren’t hooked up with savings schemes and pensions is that the financial sector’s reputation for honesty and fair dealing is at an all-time low in the Gulf States. Many have previously been sold unsuitable products in order that IFAs may benefit by huge commissions, and an unlucky few have lost everything due to outright scams. As a result, it now seems the advisability of keeping one’s cash under the mattress is at an all-time high in many expat professional destinations.
In fact, the survey said it all, as 99 per cent of respondents felt that employers were totally unconcerned about their expat employees’ financial retirement prospects and the same percentage wanted improved investment and savings benefits as an encouragement to stay with their current employers. One recent advertorial in an English language online newspaper pushed the idea that saving and investing via helpfully informative IFAs would ensure a similar quality of retirement life in the home country as expats now enjoy in the UAE - a false claim that’s easy to disprove by a quick search online.
A recent survey revealed almost half of all expats living and working in the UAE are either planning to keep working after their official retirement age or haven’t given a thought to their post-retirement standards of living. Additionally, 60 per cent had an almost total lack of financial awareness as regards long-term savings plans, with 43 per cent believing end of service benefits would take care of their post-retirement needs on a long-term basis.
Given that retirement needs are normally based on expectations as well as anticipated life spans and lifestyles, the majority of expats who’ve not made preparations for the last stage of their lives could well be forgiven for their lack of preparedness. End of service benefits in the UAE aren’t exactly generous as regards the average expat position, with 25 years’ service getting just two years of the basic salary received – hardly enough to support a less-than frugal lifestyle until the inevitable occurs.
Another reason why many expats aren’t hooked up with savings schemes and pensions is that the financial sector’s reputation for honesty and fair dealing is at an all-time low in the Gulf States. Many have previously been sold unsuitable products in order that IFAs may benefit by huge commissions, and an unlucky few have lost everything due to outright scams. As a result, it now seems the advisability of keeping one’s cash under the mattress is at an all-time high in many expat professional destinations.
In fact, the survey said it all, as 99 per cent of respondents felt that employers were totally unconcerned about their expat employees’ financial retirement prospects and the same percentage wanted improved investment and savings benefits as an encouragement to stay with their current employers. One recent advertorial in an English language online newspaper pushed the idea that saving and investing via helpfully informative IFAs would ensure a similar quality of retirement life in the home country as expats now enjoy in the UAE - a false claim that’s easy to disprove by a quick search online.
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