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UAE based expats accused of not saving for retirement
| Published: | 29 Aug at 6 PM |
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In spite of receiving good salaries and relocation packages, very few expats from the West working in the UAE are saving for their retirement.
Given the financial advantages of working in the Middle East, its tax-free status and the global pension crisis, it’s surprising that only a small percentage of expatriates in the kingdom are looking to their future by saving for retirement. According to financial advisory companies with a presence in the UAE, only around 10 per cent of Western expat professionals are putting money away for later life.
It’s suggested that the reasons for this lack of forethought range between using spare cash from salaries to clear outstanding debts to enjoying the UAE’s extravagant upscale lifestyle. The region doesn’t insist on compulsory pension schemes for workers from overseas, and both the UK and USA pension schemes are underfunded due to a sharp increase in life expectancy.
According to one IFA company representative, expats should be saving at least 25 per cent of salaries paid on a monthly basis. If investing, expats should take care to check the qualifications of their advisor and only invest in regulated offshore jurisdictions such as the Channel Islands and the Isle of Man. However, some expat investors online are reporting that insurance companies in the recommended jurisdictions were happy to allow the major mis-selling of high-risk investments and are now reluctant to take responsibility for massive losses.
Meanwhile, expats living in Kuwait are less than thrilled to read they will soon be responsible for paying water and electric bills formerly the responsibility of their building’s owners. In a press release, the emirate’s Ministry of Electricity and Water has made it known that 100,000 smart water and electric meters have been ordered and will be installed in all apartments and shops. The start date for the meters will coincide with the introduction of new energy tariffs next April.
Given the financial advantages of working in the Middle East, its tax-free status and the global pension crisis, it’s surprising that only a small percentage of expatriates in the kingdom are looking to their future by saving for retirement. According to financial advisory companies with a presence in the UAE, only around 10 per cent of Western expat professionals are putting money away for later life.
It’s suggested that the reasons for this lack of forethought range between using spare cash from salaries to clear outstanding debts to enjoying the UAE’s extravagant upscale lifestyle. The region doesn’t insist on compulsory pension schemes for workers from overseas, and both the UK and USA pension schemes are underfunded due to a sharp increase in life expectancy.
According to one IFA company representative, expats should be saving at least 25 per cent of salaries paid on a monthly basis. If investing, expats should take care to check the qualifications of their advisor and only invest in regulated offshore jurisdictions such as the Channel Islands and the Isle of Man. However, some expat investors online are reporting that insurance companies in the recommended jurisdictions were happy to allow the major mis-selling of high-risk investments and are now reluctant to take responsibility for massive losses.
Meanwhile, expats living in Kuwait are less than thrilled to read they will soon be responsible for paying water and electric bills formerly the responsibility of their building’s owners. In a press release, the emirate’s Ministry of Electricity and Water has made it known that 100,000 smart water and electric meters have been ordered and will be installed in all apartments and shops. The start date for the meters will coincide with the introduction of new energy tariffs next April.
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