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Jun 2019

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UAE: Most expats lack realistic retirement plans

Source: Middle East Insurance Review | May 2019

The majority of expat employees in the UAE lack realistic plans for securing a comfortable lifestyle when they retire, according to the results of a survey commissioned by Friends Provident International (FPI) and undertaken by market research and data analytics company YouGov.
 
The survey findings on expats’ retirement plans show that overall, more than one third of respondents (34%) expect to retire by the age of 55, and more than half (53%) before they are 60.
 
Less than half (48%) are currently saving regularly for their retirement. Furthermore, only one third of respondents have an investment portfolio set aside to provide an income in retirement. Of the respondents that said they have a retirement portfolio, 53% claimed the value of their investments was less than $50,000 and 76% said the value was less than $100,000.
 
When asked where they expect to retire, 81% said they would return to their home country and the remainder to another country. Australia, Canada, New Zealand and the UAE were cited as the most popular retirement destinations for those not intending to return home.
 
Less than one third (32%) of respondents said they were entitled to a state pension in their home country – a further 16% were not sure whether they would qualify, and 52% said they would not be entitled to a pension when they retire.
 
Mr Chris Divito, managing director of Middle East and Africa at FPI, said, “It raises concern that while 75% of respondents expect to be retired by the time they are 65, less than half are currently saving regularly for their retirement. Of the people that are saving regularly, one third is only putting aside up to 10% of their monthly income. Perhaps even more worryingly, 58% of people only intend saving for up to 10 years before they retire. That is unlikely to give them enough time to build a retirement fund that is sufficient to sustain them in what should be their golden years.
 
“Based on our research, unless they take some drastic action to address the need for robust retirement planning, many expats in the UAE are going to fall some way short of achieving the comfortable retirement many of us dream of.”
 
In terms of the post-retirement monthly income respondents are targeting, 74% said they are looking to secure an income of between $1,000 and $4,000 per month. Half said they were targeting an income of between $1,000 and $2,000 per month and 24% said between $3,000 and $4,000 per month.
 
When asked whom they approach for financial advice, just 12% of respondents said they used the services of a financial adviser, while three times as many (35%) turned to friends and family. A quarter said they did their own research and financial planning online. M 
 
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