Over 80 per cent of working age people in the UAE expect to leave their savings for their children but are finding it hard to save in order to leave an inheritance, a new survey by HSBC has shown.
The findings were based on a survey conducted across 15 markets with 16,000 respondents, including over 1,000 from the UAE.
Although 85 per cent of working age people want to leave behind an inheritance, only 45 per cent are confident of being able to do so.
High living costs and other financial obligations during their earning years are some of the factors that impact the ability of working age residents in the UAE to leave behind an inheritance.
Current financial obligations to their dependents also curtail their ability to save, the study said.
This sentiment is particularly acute in the UAE as nearly 92 per cent of pre-retirees in the country say they provide regular financial support to at least one other person, which is among the highest across the world and far exceeds the global average of 73 per cent.
“Given the high proportion of expatriates in the UAE, including Western, Asian and Arab, it is not surprising to see that a majority here provide regular support to their dependents,” Khalid Elgibaly, head of retail banking and wealth management.
“While this sentiment appears to be very apparent here, it is increasingly making it difficult for people to leave behind an inheritance.
“As a result it is no surprise that the prospect of ongoing financial responsibilities is weighing on people’s minds, with more than seven in 10 (73 per cent) in the UAE being concerned about not being able to financially support family or friends in later life.”
The research also showed that fewer UAE residents received an inheritance while many in fact expected to receive one soon.
Just 39 per cent of those polled said that they expect to receive an inheritance while 53 per cent of UAE residents said that they will receive one in future.
But Elgibaly warned residents against depending on a future inheritance that might be less likely to come.
“It is alarming to see that three-quarters of those who have received or expect to receive an inheritance believe that it will help to fund their retirement, especially with over a third (36 per cent) thinking it will completely or largely fund their life after work.
“Considering more than half (55 per cent) of the working age population in UAE feels inadequately prepared for life after work as they did not start saving early enough, they are putting their future finances at risk by relying on an inheritance that is increasingly becoming less likely.”