UAE residents ‘not saving enough for retirement’

HSBC study shows saving for the golden years is not a main priority for almost nine in 10 UAE residents.

While non-resident Indians are among the UAE’s largest savers, a recent survey of global spending and saving habits from HSBC reiterates the fact that they, like everyone else, could be doing more to plan for their retirement.

The Future of Retirement 2015 report, released by the bank last week, revealed that UAE residents of all nationalities are not putting away enough early enough to prepare for their retirement.

According to the poll, saving for the golden years is not a main priority for almost nine in 10 UAE residents.

As a consequence of this, the report – which surveyed more than 1,000 residents of various nationalities – found 55 per cent of the working age population felt inadequately prepared for life after work as a result of not starting saving early enough, the highest proportion of any country surveyed to express such a sentiment.

HSBC found that 71 per cent of pre-retirees in the UAE worry about having enough money to live day to day, with 68 per cent fearing that they will run out of money after they stop working.

While a breakdown of the individual nationalities surveyed for the UAE section of the report was not available, non-resident Indians are among the most careful savers in the country, according to Gifford Nakajima, HSBC’s head of wealth development for the UAE and Mena.

“Indian customers tend to invest a higher percentage of their earnings in insurance and saving products compared with other segments such as Arab and western expatriates,” says Mr Nakajima.

“They have a much higher propensity for insurance and products such as mutual funds, and also tend to have a higher appetite for risk.”

Mr Nakajima notes that the tenure of the relationship of the bank’s NRI clients was on average twice as long as those of other nationalities, given their propensity to stay longer in the country than western expatriates.

“This means that as they stay longer in the country they tend to have a longer-term outlook,” he adds. “It also means they would tend to use local [savings] products more than other nationalities, who may choose to invest more back in their home countries.”

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