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25% of UAE residents don't save even Dh1 a month: Survey

Waheed Abbas
Filed on June 26, 2018 | Last updated on June 26, 2018 at 06.55 pm
25% of UAE residents dont save even Dh1 a month: Survey

(alamy.com)

38 per cent of adults are financially illiterate in the UAE.


Residents in the UAE should plan early to ensure a more secured financial future because nearly 25 per cent of residents don't even save a single dirham from their monthly salaries, bankers and wealth managers said on Tuesday.

"People should start saving at a very young age," said Dr. Tariq bin Hendi, EVP and head of wealth products and advisory at retail banking and wealth management at Emirates NBD.

"Saving money is not enough; residents need to think about how they manage their money, too. If you save regularly, then you can have a relaxed financial life 20-30 years down the line," bin Hendi said. 

First, people have to make a conscious choice that they want to start saving now and then financial institutions can help them, he added.

Highlighting the sorry state of financial affairs of the UAE residents, he pointed out that 38 per cent of adults are financially illiterate with 68 per cent having no formal savings while 25 per cent don't even save a single dirham from their monthly wages. More importantly, 94 per cent residents report feeling financial stress.

"Debt is not bad but excessive use of debt is bad," he said.

Ambareen Musa, founder and CEO of souqalmal.com, said people were living beyond their means because getting credit was so easy a few years back. Then credit bureau came up because banks were not able to check how much people owe to financial institutions and also not knowing the financial health of the borrower.

"But there has been a massive change in the last 12 months and people are more financially literate now. People have realised that the cost of living is going up so they have started saving now. Also, the UAE is no longer the place where people come to live for two years and then leave. Now people are building families, homes and lives here on a longer-term basis," Musa said.

Hussain Al Balooshi, program manager at Emirates Foundation for Youth Development, highlighted that financial education is pretty important and the government has taken steps by adding financial literacy in the curriculum from grade 1 to 12. 

"It is necessary to add financial education in the curriculum for young people. We still think that the youth needs more information about financial literacy because we found that 70 per cent of them, aged between 18 to 35, are struggling with their loans and credit cards," Al Balooshi added.

Citing an example, he said some individuals carried up to 36 credit cards before the establishment of credit bureau because it was possible then and the government was also supporting by paying off their loans. "But I see this is coming to an end," he added.

Interestingly, he pointed out that many financial institutions in the country reward customers who are spending money but not those who are saving the money.

-waheedabbas@khaleejtimes.com

UAE residents' financial planning

38% adult are financially illiterate in UAE
55% have a credit card loan
44% have personal loans
68% have no formal savings
19% have missed or delayed a payment in the past year
6% often miss or make late payment
94% report feeling financial stress
25% don't' save a single dirham from their monthly wage
69% have not started planning for retirement
76% have not saved in the last year for retirement
25% find monthly debt repayments stressful.

 





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