UAE: 45% of residents have not started saving for their retirement

Almost half – 44 per cent – of UAE residents intend to retire at the age of 55 but 45 per cent have not even started saving for their retirement yet, says a new survey released on Wednesday.

Surprisingly, many residents said they intend to start saving at a later stage in their lives.

Conducted by Friends Provident International (FPI) among over 1,000 UAE residents, the survey revealed that nearly two-thirds – 63 per cent – of UAE residents plan to retire before they reach the age of 60.

Of those UAE residents who said they do have some savings, over half – 53 per cent – of them said they’re in the form of general bank deposits.

In March, the Dubai government launched a savings scheme for expats working in the public sector to support them financially. The scheme will be optional for private sector firms. Multiple investment schemes will also be offered to employees, including Sharia-compliant ones.

Similarly, the Dubai International Financial Centre (DIFC) had also introduced a gratuity plan for its employees in 2020. The DIFC Employee Workplace Savings (Dews) Plan had resulted in over $127 million in assets under management as of February 2021.

However, the FPI survey found that some residents believe that they don’t need to plan very far ahead of their retirement.

Around 40 per cent said they will start saving for their retirement either 10 years or less before they retire.

“There appears to be a strong disconnect between the aspirations of many individuals in this survey in the UAE to retire early and the reality of how much they will need to save for retirement,” said Stuart Shilcock, head of sales for the Middle East at FPI.

“It is essential for everyone to prepare early when thinking about retirement,” explained Shilcock, saying there is compelling evidence to show that anyone who wants to retire early needs to save more – and earlier – in their career.

How much money is needed to retire?

He added that it is promising, however, that younger people in the UAE have a more realistic expectation about retirement as more respondents in the 18- to 24-year-old age group than any other said they will start saving either between 15 and 20 years before they retire or between 20 and 25 years.

The majority – 54 per cent – of the UAE residents believe that they need a monthly income of around Dh 9,000 to over Dh18,000 to

Over a quarter – 27 per cent – think they can retire on less than $2,500 a month, while a similar percentage of people believe that $5,000 will be enough. Another 15 per cent acknowledged that they don’t know or are unsure of the amount required to retire.

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