By Sarah Townsend
National Bonds Corporation survey finds 64% cite living costs as biggest financial concern
The rising cost of housing, bills and education has the biggest impact on UAE residents’ ability to save, according to a survey from investment company National Bonds Corporation.
Nearly seven in ten (64 percent) of respondents said accommodation costs ate up most of their budget, while 46 percent said increasing utility costs as their biggest worry. Meanwhile, 45 percent cited rising school fees as their biggest concern.
Mohammed Qasim Al Ali, CEO of National Bonds, said: “Increased house rents, increased costs of utility items and children’s educational expenses appear to place the most pressure on households across the country.”
Dubai’s inflation rate rose to 1.75 percent during the first six months of the year compared to the same period last year, according to Dubai Statistics Centre. Housing, water, gas and electricity costs registered a 3.91 percent increase, while the cost of education rose 5.79 percent.
In Abu Dhabi, 51 private schools have just been granted permission to increase their fees by an average of six percent for the 2016-2017 academic year.
National Bonds’ 2015 Savings Index, conducted by Sondos Market Research, is based on a survey of 2,000 respondents across the GCC, including 700 in the UAE.
Despite rising living costs affecting residents’ budgets, 84 percent of UAE respondents said they were financially stable and only 6 percent said they had no plan to start saving. Twenty-one percent of Arab expats indicated no interest in saving, the survey found.
Respondents regarded 2015 as a better year for saving than 2014 – 30 percent said 2015 was a good year for saving compared to 26 percent in 2014.
Some 44 percent of respondents cited better available investment opportunities in the UAE in 2015 compared to the previous year. On the flip side, 45 percent said that high living costs and inflation were the main reasons 2015 was not suitable for saving.
Less than half (44 percent) of respondents said they expected their income to increase in 2016, the survey showed.
The survey also revealed that Western expatriates are the most committed to regular saving (48 percent of them), followed by Asians at 44 percent, followed by UAE and Arab nationals (28 percent and 27 percent respectively). Among those that save regularly, 87 percent said they save on a monthly basis.
However, 84 percent of UAE respondents said their savings are not enough for the future, compared to 77 percent in 2014.
Al Ali said: “This indicates an increasing awareness of the importance of saving year after year, and that people’s dissatisfaction serves as a high motivation to continue and grow their savings.”
He added: “The National Bonds Corporation Index helps people understand the social and economic situation of different segments of our community.
“We believe such clarity will eventually help a lot more people to improve future planning and review their financial behaviour in light of the economic and social changes.”
I don't think it is financially feasible any more for expats to live in Dubai; taking into consideration that most are without pension at back home and rely on their savings for retirement.