Nearly 60 percent of UAE workers are reliant on gratuity payments to partly or fully fund their retirement, according to new research from Old Mutual International and Quilter Cheviot.
According to the research, 84 percent of survey respondents in the UAE said that they will receive end-of-service gratuity when they leave their company. For a majority (62 percent), the payments will exceed over AED 20,000.
Additionally, 62 percent of respondents said that they plan to retire in their home countries, although Old Mutual believes this number may decrease in the wake of the UAE’s decision to introduce five-year visas for retirees above the age of 55.
Already, 18 percent of respondents said they hoped to retire in the UAE, compared to 15 percent in 2017.
A vast majority of people (8 out of 10), however, said that they plan to continue working after retirement, primarily for social (45 percent) or financial (35 percent) reasons. Of the total, 81 percent said they expect to be self-employed in retirement.
In 2017, 43 percent of people said they expected to retire between the ages of 50 and 55. In the more recent survey, however, this figure dropped to 35 percent, with a significant number of respondents now believing that they will have to retire later in life.
Almost half (47 percent) of respondents said they expected their retirement to last between 11 and 20 years.
“Gone are the days of someone receiving a hold watch on the day they retire and then solely relying on their pension for the rest of their life,” said Paul Evans, Old Mutual International’s head for the Middle East and Africa. “Instead, our research shows people may choose to work part-time or even in a self-employed capacity.”
Evans added these “these new practices mean that creating a financial plan, which takes into account someone’s unique circumstances, is more crucial than ever.”
He also said that the number of people who are relying on their end-of-service gratuity for retirement “could be a cause for concern, as the research shows that on average they are relatively small payments.”For all the latest business 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.
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