UAE’s Western Expats Spend Heavily On Luxury: Survey

UAE expats are “less prudent” than their counterparts in Singapore and Hong Kong with regards to financial planning.

Around 97 per cent of UAE-based western expatriates spend some of their disposable income on luxurious lifestyle choices, according to a study by Standard Life.

The report studied the saving, spending and investment behaviour of approximately 400 western expats across the UAE, Singapore and Hong Kong.

UAE-based western expatriates were found to be “less prudent” than those in Singapore and Hong Kong when it comes to financial planning. The expenditure on luxurious lifestyle options was much less among the western expats in Singapore (51 per cent) and Hong Kong (47 per cent).

The surey also found that only 31 per cent of the UAE expats were likely to seek professional financial advice as compared to 49 per cent and 53 per cent in Singapore and Hong Kong respectively.

Western expats in each of the three countries also prefer differing investment options, the survey found.

Only nine per cent of the UAE respondents preferred investing in equity, compared to 43 per cent in Singapore and 71 per cent in Hong Kong. Meanwhile around 70 per cent of the UAE respondents invested in mutual funds as compared to 67 per cent in Singapore and 56 per cent in Hong Kong.

Respondents in Singapore also preferred gold and property investments much more than their counterparts in Hong Kong and the UAE.

“It is seen that investors in more developed capital markets like Hong Kong and Singapore had a higher allocation for equities than upcoming markets like the UAE,” said Chris Divito, CEO, Standard Life International Limited (DIFC Branch).

“Nevertheless, expatriates have international mobility when it comes to savings/investments and it really boils down to the quality of financial advice and choice of products they are getting.”

Around 76 per cent of the UAE expats surveyed said that they have sufficient income post retirement. However the survey also revealed that only 35 per cent of the UAE residents plan to return home post retirement as compared to 90 per cent in Singapore.

“The belief about sufficient retirement planning amongst UAE respondents is quite interesting as this group was found to have the least inclination for savings,” said Divito.

“There could be a mismatch between aspirations and realities or income and expenditure.”