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Because the UAE’s workforce eagerly anticipates their annual bonuses, a current survey by market analysis firm YouGov, commissioned by Zurich Worldwide Life, a part of Zurich Insurance coverage Group (Zurich), sheds gentle on how residents are approaching monetary planning, significantly when it comes to retirement.
The findings underscore a shifting panorama the place saving for retirement competes with different monetary priorities, urging people to rethink tips on how to spend their bonus in a bid to satisfy their monetary objectives.
Carried out in January 2024, the survey lined 1,000 residents within the UAE, together with dad and mom and married residents throughout numerous earnings teams, nationalities, occupations, genders and age teams.
Bonus expectations throughout demographics
The survey reveals that 68% of respondents anticipate receiving a bonus this yr, in comparison with 48% in 2023, marking a notable enhance from final yr. Among the many nationalities surveyed, Emiratis had been extra optimistic about receiving a bonus this yr at 78%, adopted intently by Arab expats and Asians at 65%. Solely 54% of the Western expats surveyed had been hopeful of receiving a bonus in 2024. Whereas 32% anticipated a bonus of as much as AED20,000 in 2023, 77% anticipate a bonus of as much as AED25,000 in 2024.
Amongst respondents, saving for kids’s training stands out as the principle precedence for 37%, with vacation spending trailing intently at 34%. In distinction, solely 22% prioritize saving for retirement, reflecting a decline in comparison with final yr (34%). UAE residents over the age of 45 years exhibit a better inclination in direction of retirement financial savings (30%), indicating a generational hole in monetary planning priorities.
Want to retire within the UAE
Virtually 7 in 10 specific a need to retire within the UAE, reflecting confidence within the nation’s long-term prospects. Notably, youthful UAE residents between 18-24 years present a powerful inclination in direction of retiring within the UAE (89%), underlining a rising perception within the nation’s financial future, the attract of its dynamic life-style and profession alternatives, and difficult conventional notions of retirement overseas.
The surge in prioritizing retirement planning amongst people aged 45 and above, lots of whom (42%) have known as the UAE dwelling for greater than 20 years, underscores a rising understanding of the significance of securing your monetary future. That is influenced by a deep-rooted attachment to the UAE as a most well-liked vacation spot for retirement, additional strengthened by current authorities initiatives.
Funding traits and monetary planning
The survey reveals that solely 4% at the moment make investments by means of a retirement financial savings plan, with a majority choosing gold (50%) and actual property (47%). The dominance of gold and actual property investments suggests a cultural affinity for tangible belongings and a choice for investments perceived as secure and appreciating over time.
Regardless of the significance of retirement planning, a staggering 61% haven’t thought of in search of monetary recommendation, suggesting a niche in monetary literacy and preparedness. This discovering underscores the pressing want for enhanced monetary literacy programmes and accessible advisory companies.
“Monetary planning could be a daunting process, if achieved with out correct steerage. In search of knowledgeable monetary recommendation frequently is essential, regardless of the place you’re in your life journey. With the proper recommendation, people could make knowledgeable choices, getting one step nearer to assembly their monetary objectives,” mentioned Taru Singhal, Head of Retail Distribution, Zurich.
In terms of retirement objectives, the will to start out a enterprise emerges as the highest precedence for 44% of respondents, intently adopted by sustaining their present life-style at 37%. Nonetheless, issues about monetary consolation in retirement stay prevalent, with 61% of respondents expressing apprehensions about their monetary scenario post-retirement.
In response to the survey, 22% of the respondents mentioned that saving 16-20% of their wage could be adequate to allow them to attain their monetary objectives, in comparison with 31% who felt that saving between 6-15% of their earnings was sufficient.
“Residents at the moment are trying to retire as early as 50. Our newest survey reveals that 73% of working people within the UAE intention to retire between the ages of fifty and 65. The sooner you propose to retire, the extra essential it turns into to plan forward, ideally by means of a devoted financial savings plan, to make sure a secure monetary future,” mentioned Taru.
The survey additionally revealed a notable divergence in funding methods between age teams the place 56% of youthful people (18-34 years) confirmed a better tolerance for danger and had been in favour of non-traditional investments. As compared, older respondents (45 and above) favoured conventional funding avenues (63%) and prioritized safeguarding retirement funds (22%).
In conclusion, the survey paints a nuanced image of the UAE’s monetary panorama, emphasizing the necessity to re-evaluate bonus spending and retirement planning. Whereas most residents spend an enormous chunk of their bonuses on holidays and investments in belongings like gold and actual property, it’s important to emphasise the important nature of long-term monetary safety, notably by means of devoted retirement financial savings. As residents ponder their monetary futures, prioritizing retirement planning and in search of skilled recommendation is instrumental in guaranteeing a snug retirement right here within the UAE.
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