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

Most NRIs trust family instead of professionals when seeking financial tips

42 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.

Infographic

Who do you trust most for financial advice?

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  • Anil, Cheruvalloor, Kollakadavu

    May 27, 2013 5:34

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 So kindly request you to do not publish any surveyresults which will adversely affect the specified community.

  • Anil, Cheruvalloor, Kollakadavu

    May 27, 2013 5:14

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

  • Farha

    May 27, 2013 5:11

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

  • Tsar

    May 27, 2013 4:58

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

  • Jatin

    May 27, 2013 4:39

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

  • Lokesh

    May 27, 2013 4:36

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

  • Anup

    May 27, 2013 4:32

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

  • Saqib Ahmed

    May 27, 2013 3:51

    That's gross exaggeration.

  • Sarah

    May 27, 2013 3:28

    This is impossible

  • Mohammed

    May 27, 2013 3:26

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

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Infographic

Who do you trust most for financial advice?

Who do you trust most for financial advice?

Latest Comment

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

Anil, Cheruvalloor, Kollakadavu

30 May 2013 13:45jump to comments