Only one per cent of the respondents claimed that their savings were ‘more than enough’ for the future. (Getty)
The majority of UAE residents don’t save enough for the future, according to National Bonds’ latest annual report.
The 2012 National Bonds Savings Index found that 87 per cent of UAE residents do not believe that their current savings are adequate for the future while only one per cent of the respondents claimed that their savings were ‘more than enough’.
However, the index, which is being published for the third consecutive year, found that there was a slight positive increase of saving sentiment in the UAE compared to 2011. Priorities also changed, with saving for retirement replacing saving for children’s education as the number one reason for saving in the country. The top three priorities were: saving for retirement, children’s education and purchase of property for personal use, with the results consistent across Emiratis, Arab expats, Asian expats and Western expats, said the report.
The index also identified a trend towards “wiser spending”, as fewer people claimed to be spending a lot on flexible costs like transportation and household/utility items, and attribute their spending to fixed costs such as children’s education and rents.
While saving for weddings was a high priority for Emiratis just two years ago, it is now the tenth priority on their list, falling behind expenses such as purchase of a car and house renovation, the report added.
Western expats had the highest sentiments regarding the savings environment, with 41 per cent believing it is a good time to save, followed by Asian expats (31 per cent) and Arab expats (29 per cent). There was also an overall increased optimism towards job stability, as 85 per cent of respondents believe that their financial status will remain stable or improve in the next six months, while 92 per cent state that their income will remain stable or increase over the same period.
When asked about the drivers of choice for savings instruments, the top three factors respondents chose were attractive returns, Shariah compliance and the strong reputation of the provider.
The 2012 National Bonds Savings Index was conducted in April and May 2012 by YouGov using an online interviewing mechanism, and was carried out in Arabic/English languages across a sample of 611 respondents in the UAE.