Around 77 per cent of the UAE residents believe that their current savings are not adequate to fund their future needs, according to the latest savings index from National Bonds Corporation.
The index includes the results of a comprehensive annual survey that tracks the saving and spending habits of residents in the UAE.
Of those polled, around 54 per cent listed inflation and high costs of living as key factors that impacted their current annual savings plan.
The study also showed that the majority of UAE residents spent a significant portion of their savings on house rents and utility bills.
Around 78 per cent of the respondents said that increased rents have put pressure on their savings while 64 per cent said that rising costs of utility items impacted their ability to save.
However, the index revealed that most residents planned to increase their savings in the next few months.
About 62 per cent of the residents who save regularly said that they plan to increase their savings in the next six months while 35 per cent of non savers plan to start saving during the same period.
Meanwhile, 22 per cent of the respondents surveyed admitted to saving slightly more in comparison to the same period last year (an improvement of four per cent from 2013) while 31 per cent of the residents polled claim they are saving about the same as last year, up from three per cent in 2013.
The study also showed that UAE residents continued to have financial liabilities with over half of them having loans with up to the majority paying out either one or two loans.
Around 87 per cent also said that their financial status will remain the same or become stable over the next six months.
Taking into account the three key factors of financial stability, potential for savings, and the existence of an enabling savings environment, the study revealed that the country’s savings environment has remained unchanged with 26 per cent of those polled claiming 2014 as a good time to save.
“The 2014 savings index results are clearly indicative of negative market factors inhibiting segments of the UAE population from developing a healthy savings habit and achieving financial stability,” said Mohammed Qasim Al-Ali, CEO of National Bonds.