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UAE-based western expats less sensible with money
Emigrants from the west in Singapore and Hong Kong more financially practical, reveals study.
September 25, 2013 5:05 by Muhammad Aldalou
Western expatriates in the UAE are less sensible than their Singapore and Hong Kong-based counterparts when it comes to financial planning, according to a new study released today by Standard Life.
The ‘Western Expat Wealth Study’, canvassed approximately 400 western emigrants in the three countries, reveals that 97 per cent of all UAE-based western expats spend some of their disposable income on ‘luxurious lifestyle choices’, compared with 51 per cent in Singapore and 47 per cent in Hong Kong.
The findings were slightly surprising, considering that “most become expatriates due to financial reasons”, says Chris Divito, CEO of Standard Life International Limited (DIFC Branch). He adds that most western expats move to high-earning, tax-friendly cities with the intention to save and secure their financial future.
The study also disclosed interesting numbers about saving for retirement – a high number of respondents in Hong Kong (84 per cent) believe that they will have sufficient income post-retirement, followed by the UAE (76 per cent) and Singapore (47 per cent).
It also indicates that fewer UAE respondents (35 per cent) will return home after retirement, in comparison with 90 per cent in Singapore that intend to go back.
A preference towards equity investments in respondents in Singapore (43 per cent) and Hong Kong (71 per cent) were found to be significantly higher when compared with the UAE expats (nine per cent). Property investments were most popular amongst Singapore expats (78 per cent), followed by Hong Kong (55 per cent) and the UAE (48 per cent).
Divito says that the belief about sufficient retirement planning among UAE respondents was quite interesting, as they were found to have the least inclination for savings. “There could be a mismatch between aspirations and realities, or income and expenditure,” he adds.
If you ask Kipp, Divito is right on the money here. After all, you’d be hard-pressed to find a study, survey or poll in the past year that indicates that UAE residents (western or otherwise) are indeed saving enough money for retirement.
For example, HSBC’s annual Future of Retirement study, which was released in February 2013, surveyed over 1,000 people in the UAE and concluded that residents were “dangerously unprepared” for retirement, with 89 per cent unable to describe their current savings as more than adequate.
However, recent studies show that a high percentage of expatriates in the Mena region are optimistic about the future and feel very confident that their financial situation will improve in the next six months, with consumer confidence in the UAE currently at an all-time high.
Additionally, in a ‘National Bonds UAE Savings Index’ study released in September 2012, 87 per cent of residents did not believe their savings were adequate for the future, while 35 per cent said that they were saving regularly. At the time, the latter figure represented a six per cent jump from the year before.
According to respondents of HSBC’s study, day-to-day expenses were the main reason why people were unable to save. Are you saving enough? If not, tell us why.