UAE residents plan to save more, study finds

Mounting loans remain one of the most likely factors to impact savings plans in the UAE.

Residents across the UAE are confident that 2017 will be a more financially stable year for them, and have expressed a willingness to start saving more in the coming months, a study has recently found.
National Bonds Corporation's 2016 Savings Index revealed that 85 per cent of the respondents in the UAE foresee a stable financial status in 2017, and 64 per cent plan to save more. In addition, 62 per cent UAE nationals, 65 per cent Arab expatriates, 65 per cent Asian expatriates, and 50 per cent Western expatriates expressed the intent to increase their savings in the next six months. Furthermore, a larger number of non-savers planned to begin saving in 2016, including 71 per cent Asian expats compared to 65 per cent in 2015, while the proportion remained the same for Emiratis at 50 per cent and Arab expats at 88 per cent.
"The statistics of our 2016 survey show a positive uptick in awareness of the importance of saving and we found that 68 per cent of the respondents plan to start saving compared to 31 per cent in 2015," said Mohammed Qasim Al-Ali, CEO of National Bonds Corporation. "The entire UAE population, including nationals and expats, are more financially aware with the increase in savings potential reaching 19 per cent."
A decreased 27 per cent of the respondents in the UAE regarded 2016 as suitable for saving, compared to 30 per cent in 2015. To questions on why 2016 was a good year for saving, 36 per cent of the respondents cited better available investment opportunities in the UAE. On the flip side, 38 per cent said that high living expenses and inflation were the main reasons that 2016 was not suitable for saving. Interestingly, 50 per cent of the respondents received a pay rise and/or bonus in 2016. Of those respondents, 77 per cent saved some of the additional money earned.
Al-Ali also noted that mounting loans remain one of the most likely factors to impact savings plans. Settling these debts, he said, is integral to achieving financial health and happiness for individuals.
"Debt management is not a common human attribute, and a significant number of people fall victim to the whirlpool of loans due to their illiteracy in budget management and risk assessment," he said. "The results of the 2016 index indicate that 59 per cent of respondents have loans, of which 17 per cent even have two loans. Personal loans remain on top of the list with 67 per cent and only 22 per cent have a mortgage."
In the context of regular saving, the index has revealed that 91 per cent save monthly, compared to 87 per cent in 2015. At 46 per cent, Western expatriates are the most committed to regular saving, closely followed by Asians at 45 per cent, while Arab national savers accounted for 26 per cent. UAE national regular savers increased from 28 per cent in 2015 to 37 per cent in 2016.
- rohma@khaleejtimes.com