Business | General

Indian expats saving up to 70% of disposable income in UAE

Most NRIs trust family instead of professionals when seeking financial tips

  • By Cleofe Maceda, Senior Reporter
  • Published: 15:01 May 26, 2013
  • Gulf News

When it comes to saving money, Indians are a diligent bunch, but many of them rarely feel inclined to get professional advice for financial and retirement planning.

A study by Standard Life released on Sunday showed that while the average UAE-based non-resident Indian (NRI) sets aside 70 per cent of their disposable income for investment and saving, majority of them would rather seek the opinion of their relatives instead of professionals when managing their money.

The study among 300 NRIs showed that 44 per cent of respondents depend on family members for financial advice. Among those who turn to the experts for guidance, 21 per cent choose NRI financial advisers, 18 per cent rely on their bank and 10 per cent turn to non-NRI advisers.

Financial experts have time and again highlighted the value of financial advice. With the cost of living as well as education rising every year, it is more important than ever for consumers to let experts guide them on how to manage, save and invest their money wisely.

Standard Life said in its report that the results of the study only indicate that trust is a major consideration for Indians when dealing with financial advisers.

“It is really interesting to see that many NRIs trust family members instead of professionals when seeking expert advice for financial planning,” said Chris Divito, CEO of Standard Life Limited, Dubai International Financial Centre branch.

Strong savings ethic

Divito noted that Indians have a “strong savings ethic”, with two-thirds of them allocating between 50 per cent and 90 per cent of their disposable income towards savings and investments.

“If this pro-savings approach were to be supplemented with expert advice, then they could reap the benefits of professional financial planning for a more secure future,” he added.

Standard Life had noted in its earlier study that there are major gaps in NRIs’ financial and retirement planning. Most Indians in the UAE, according to the study, expect their children to look after them when they get older, and they don’t invest in formally constituted retirement savings plans.

About two out of eight NRIs (82 per cent) have two to five people relying on them for money, while more than half have three or four financial dependents. The overwhelming majority (90 per cent) see a huge chunk of their earnings spent on children’s education.

While the scope of their financial obligation is so big, most NRIs (75 per cent) tend to overlook the value of securing a worry-free future, saying that they expect their children to look after them in retirement.

Comments (42)

  1. Added 17:34 May 27, 2013

    May be the people who participated in this survey were confused with the word 'Disposable Income'. Because of the present cost of living most of the people can save only 10 to 15 Percentage of their total income. Anybody having commonsense can understand the reliability of this survey at first sight. So kindly request you to do not publish any survey results which will adversely affect the specified community.

    Anil, Cheruvalloor, Kollakadavu, Dubai, United Arab Emirates

  2. Added 17:14 May 27, 2013

    I having a decent job with good enough salary. I will make my life happy with my family by spending money wisely. Before I am going out for shopping & Dining once in a week, but now I changed the frequency to once in a month. Me with my wife took decision to cut all additional unwanted expenses to save enough money for our kids education and our future life. Because of insecurity of job and wealth we have to be very alert. Now I am not spending any money to buy electronics, computers, Mobile Phones because they don't have any resale value. I will spend money to buy materials in which is having resale value and we can easily convert to money easily also. Otherwise we are working here, spending all of your earnings here then how we can survive in our old age? So I have to advice all, especially youngsters, think twice bfore spending money...!

    Anil, Cheruvalloor, Kollakadavu, Dubai, United Arab Emirates

  3. Added 17:11 May 27, 2013

    Thanks for the advice! After seeing the results from western countries and Europe, these financial advisors moved to Middle East. Sincerely to all expats should manage and note that the best friend of your wealth is themself and then family and friends. Is it possible that someone else have more concern than yourself!? Asian community here is well aware of their responsibliities, take care of their dependants and can manage their finances.

    Farha, Dubai, United Arab Emirates

  4. Added 16:58 May 27, 2013

    I usually spend 100% of my disposable/discretionary income. That is because I always set aside the savings from my income first, then the amount for necessary expenses....

    Tsar, Dubai, United Arab Emirates

  5. Added 16:39 May 27, 2013

    I dearly agree with Vicky’s comments. It’s very true that UAE has encouraged us into better living conditions in a safe environment. I’m here past 10 years & believe me I really take UAE as my second home. If I had enough resources I would not hesitate to buy my home here itself. Now the critic part where I somewhat disagree, it’s that you & me correctly know this information is not really categorized to middle income earners which is highest bracket of critics here. I’m not persuading that you are wrong but when you have kept your views let others also keep their comments or views even if its in form of criticizing the whole report. Lets enjoy each views as per their perspective towards income or saving.

    Jatin, Dubai, United Arab Emirates

  6. Added 16:36 May 27, 2013

    This is not true. In reality Indians dont believe in the financial experts or wealth management professionals. Yes I also prefer to invest elsewhere or with the advise of my relative rather than so called financial experts who dont even bother to answer your phone calls once the product has been sold. I have had this personal experience and I would surely pass on the same advise as to many as possible. Better to invest in old school activity of buying sites, houses etc rather than getting in to some investments which has to do with share markets and lose hard earned money. Reason = poor customer service from wealth management. Yes I am one of the victims !!

    Lokesh, Dubai, United Arab Emirates

  7. Added 16:32 May 27, 2013

    This is an interesting article and while I have to admit that 70% is quite a high figure to save, a decent amount is set aside for savings on a monthly basis. I am not among the high income brackets but with my wife working and ensuring sensible spends, not compromising on basic leisure and entertainment, we are able to save well. During my bachelor days in Dubai when the salaries were lower, I was still able to save around 35 to 40% of my income. UAE gives you the opportunity to splurge but I firmly believe that one must cut his coat according to his cloth. Speaking to the critics who have responded, even if they are not able to save anything, I am sure the standard of living is far greater here than back home. I have a simple calculation to understand the purchasing power of ones salary here versus back home. In the case of a bachelor, If I draw a salary of AED 5000 and assuming that I spend AED 2000 for rent and food (This can be achieved although with a bit of struggle) I can purchase the following – A 40” LCD, DVD Player, Refrigerator, Mixer, basic utensils with my 1 month’s salary If I draw the same salary in India - Rs 72500 (lets say Mumbai)– After Tax deductions, I would probably receive RS 55000 in hand Assuming that I spend RS 15000 on rent and food (This may be less but let’s take an average) I can purchase a 40 inch LCD and that’s it. If managed well, we can save well in UAE but if we get carried away looking at the posh lifestyle of others then I must say We will be axing our own feet. My fellow brother who mentioned in one of his comments was earning AED 10000 per month and not being able to save anything, is like having oxygen all around and not knowing how to breathe.

    Anup, Dubai, United Arab Emirates

  8. Added 15:51 May 27, 2013

    That's gross exaggeration.

    Saqib Ahmed, Dubai, United Arab Emirates

  9. Added 15:28 May 27, 2013

    This is impossible

    Sarah, Dubai, United Arab Emirates

  10. Added 15:26 May 27, 2013

    Hardly May be 7%, but no ways 70%.

    Mohammed, Sharjah, United Arab Emirates

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