Only 16% of expats put away more than 30% of their monthly income
One in five expats living in the Gulf do not save any of their monthly salary and nearly half save less than five percent, according to a new survey released this week.
The survey, carried out by consultancy firm Insight Discovery, found that 22 percent of expatriate residents surveyed said they save nothing every month. Another 27 percent save less than five percent of their monthly salary and 13 percent said they only put aside between six percent and 20 percent.
At the wealthier end of the spectrum, a fifth of expats save between 21 and 30 percent every month, while only 16 percent save more than this.
“This year, our story is one of significant adjustment in the economies of the GCC region. At a time of softness in oil prices and geo-political uncertainty, businesses have cut costs by employing fewer and cheaper expats, many of whom cannot afford to save much,” the report said.
The results are despite the fact that the results of the latest HSBC Expat Explorer survey, released in January, found that nearly three-quarters of expats working in the United Arab Emirates earn more than they could in their home country.
“Better earning potential is the cornerstone of why people seek career opportunities here. It is indicative of the success of UAE’s focus on diversification, which has resulted in the creation of an internationally recognised and sought-after working environment, ” Marwan Hadi, head of retail banking and wealth management, UAE, HSBC, was quoted as saying.
While expats earn higher salaries that they would achieve at home, a poor savings record has been a common them in the region. “Living and working in the UAE allows people to live a certain lifestyle and unfortunately savings can often be forgotten about,” said Gemma Frankland, head of global partners at Guardian Wealth Management said in August last year.
“Although there can be a lot of demands on your salary, from school fees, car payments, it is important to plan for the future.
“If you are here on a fixed-term contract, or only plan on staying for a few years before returning home, possibly to a lower salary, it is important to use your time in the UAE to save as much as you can for the future by putting money into a suitable savings plan.”
She said it is often only after a major change in circumstances, such as the loss of a job or making the decision to relocate, that expats realise the impact years of bad financial planning can have on the rest of their life.
“The earlier people start saving the better. For your long-term goals such as retirement, you should try to put away 20-30 per cent of your monthly salary,” said Frankland.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.