A lack of savings, poor financial discipline and no long-term plans are among the biggest worries facing expatriates in the UAE, according to Guardian Wealth Management.
In a new report, the financial advisory firm said that, despite earning higher salaries than they would back home and not paying income tax, many expats in the UAE struggle to put away money each month or simply neglect the need for savings all together.
In fact, Guardian Wealth Management reckons that individuals could be jeopardising as much as AED 330,500 in savings over five years, which is the average length of time an expat stays in the UAE.
“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.
“Although there can be a lot of demands on your salary, from school fees, car payments etc., 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.”
That said, demands on UAE residents’ salaries have increased during 2018, particularly since the introduction of value-added tax (VAT). According to yallacompare’s most recent Consumer Confidence Tracker, 13.9% of UAE residents are now struggling to make ends meet as a result of cost increases related to the introduction of the tax. And that’s compared to 11.9% who said the same thing in the first quarter of the year.
The result of this on savings can clearly be seen. The tracker revealed that 43% of UAE residents save a portion of their salary every month. And of those who do, 55% are saving less than they were 12 months ago.