Dubai - National Bonds study points out changing financial behaviours.
The trend among UAE residents to save for retirement is growing, a survey by National Bonds Corporation shows.
The financial health check survey by the leading Shariah-compliant savings and investments company in the UAE shows that in the second quarter 42 per cent of the respondents saved for retirement, marking a six per cent increase compared to quarter-one results, while 31 per cent save regularly to buy a home, a three per cent increase over previous results.
According to the survey, 14 per cent saved for their children's education, 10 per cent lower than those in first quarter.
The survey also indicates that 13 per cent of the respondents save for basic needs.
Designed by financial advisers at National Bonds, the financial health check was launched in February 2015 to help customers assess their financial status and take corrective action towards achieving a more resilient financial future. To date, the survey has received responses from more than 1,000 customers across cultures and nationalities. The results for the first quarter of this year had revealed positive financial practices for most respondents, especially the youth.
The majority of the survey respondents are married couples (81 per cent), with bachelors comprising 18 per cent and divorcees accounting for only one per cent. Most respondents (64 per cent) have children. While 72 per cent of them fall within the 26-40 year age group, 19 per cent are from the 41-55 year age category and only seven per cent fall within the 18-25 year age group.
The survey's results divide the majority of respondents with children (64 per cent) into two categories: 19 per cent say they save for their children's education, while 48 per cent do not have an emergency fund.
In additional findings from the survey, 47 per cent of the respondents said they make monthly payments towards personal loans, a three per cent increase compared to the previous quarter. Furthermore, 38 per cent of respondents admitted to paying off debts towards credit cards, while 15 per cent pay out home mortgages in comparison to 18 per cent in the prior survey.
The survey has also recorded a notable decline in saving among the 18-25 year age group, with 73 per cent of them saving regularly - nine per cent lower than the last quarter's results. Also, 27 per cent of the respondents from this segment admit to not having a specific savings plan, compared to 18 per cent in the first quarter of 2015.
In the 41-55 year age group, 49 per cent of the respondents said they make payments towards personal loans, a four per cent increase compared to previous results. Savers for retirement in this group surged to 53 per cent, while 43 per cent make monthly payments towards credit cards, an increase from 36 per cent in first quarter.
The financial health check results also indicate that 54 per cent of respondents in the 26-40 year age group keep a regular record of their expenses, while 46 per cent do not. In the same age category, 71 per cent of respondents said they regularly pay for credit card expenses. The survey also found that 28 per cent of respondents have a written will of inheritance.
In yet another interesting outcome, 86 per cent of respondents said they do not have a financial agent or planner to help them manage their finance and money issues, which is a five per cent increase compared to first quarter results. Additionally, 78 per cent of respondents admitted to not having takaful insurance.
Mohammed Qasim Al Ali, chief executive officer of National Bonds, said the results of the survey are somewhat different from the previous one.
"This is logical and can be attributed to varying socio-economic factors that affect financial behaviour positively or negatively. For example, priority is usually given to education or buying a house at the beginning of the year, while behaviours change in the second quarter with the onset of the holiday and summer seasons," he said.