The resident received the Abu Dhabi Award personally from President Sheikh Mohamed for her heroic action on April 19
There will be a big difference in the amount people save if they start saving at the age of 45 instead of 26, which is the global average. The survey finds that the UAE along with France has the joint highest age that people started saving for retirement.
In general, UAE residents say there is nothing much left for saving, but actually they are spending more than they need on their current lifestyle, according to a top official of HSBC.
“It is natural to prioritise immediate needs and wants above longer term financial health, but these ‘savings gaps’ that occur due to a lack of financial preparation, can equate to serious holes in people’s retirement savings in the long run, once interest and investment growth are taken into account,” Rick Crossman, Head of Retail Banking & Wealth Management, UAE, HSBC Bank Middle East Limited, told reporters at a news conference, which was held to unveil the survey results in Dubai.
Addressing the news conference, Gifford Nakajima, Regional Head of Wealth Development, HSBC Bank Middle East Limited, said: “People must realise that just a year or two without saving can have a significant impact on their future income in retirement. Having a financial plan and just saving something, however small to start with, earlier can make a big difference to retirement income in the long run.”
Advisor always better to advise on risk associated with the investment and planning, Crossman said, adding that people are not aware how much professional financial advice can help them save.
UAE residents are dangerously unprepared for their retirement, with 89 per cent unable to describe their current savings ‘more than adequate’ for the future and more than half admitting that they fear financial hardship during their retirement, according to the results.
The survey revealed that nearly half (46 per cent) of residents are still being held back from saving due to their inability to deal with the day to day costs of living in the country. Other reasons cited range from the lack of pension schemes for non-Emiratis to a lack of understanding of savings and investments.
Many also attribute their lack of savings to the fact that retirement is ‘too far away to worry about’ — a perception that explains why the UAE is the joint highest globally in putting off saving for retirement, with people beginning to save at an average age of 30. This is in stark contrast with countries such as UK and US, where people begin saving in their mid-twenties. Worryingly, UAE residents also believe that they can put off their savings as late as the age of 37 and still expect to maintain the same standard of living they currently enjoy.
On a global level, the ‘life events’ that have impacted people the most are uncontrollable factors such as the recession and losing their job, whereas in the UAE it is buying a home (43 per cent) and paying for children’s education (34 per cent), both factors that can be controlled through careful planning.
UAE residents also rely heavily on cash savings in their retirement rather than diversified savings, with 57 per cent expecting cash savings to be their most important source of income at that stage in their life.
The findings are described by experts at HSBC as a ‘time bomb’ which will leave millions of people facing a drastically reduced standard of living in later life, a sentiment that is reaffirmed by the fact that UAE respondents on average expect their retirement to last 15 years, while their savings for retirement will only last them nine years on average.
The resident received the Abu Dhabi Award personally from President Sheikh Mohamed for her heroic action on April 19
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