It is an alarming statistic that more than 90 per cent of the prospective clients we meet have savings of less than six months’ income. It is therefore
a positive sign that a considerable and growing number of our mainly expatriate clients are seeking to maximise their
wealth with an offshore regular savings plan.
The demand for such plans has always been strong among our clients, but it has continually increased since the economic downturn.
The world has changed and people now seem more financially savvy than ever before. Most individuals are more
aware of the tangible benefits
that saving brings for them and
their families.
The outline
Offshore savings plans allow expats to build funds for their future and are typically able to beat the historically low interest rates being offered by local banks. In most cases, expats are able to reach their most important financial goals quicker than they would have without adopting this disciplined
strategy.
Regular savings plans can be invested in low-to-high risk assets. As such, it is highly recommended that your risk and
return profile is carefully assessed by an independent financial adviser with relevant expertise and experience.
For your kids
For many expats, the key driver in opting for a plan through which they can save on a regular basis is to make provisions for their children’s education. All parents want to give their children a great start in life through the best education. However, and perhaps not unsurprisingly, the overarching aspect that leaps up when it
comes to overseas education is cost — not only tuition but living and travel expenses too.
A regular savings plan means you can avoid compromising your children’s education, or even your own lifestyle due to insufficient funds.
One education fee plan we often recommend is Premier Advance offered by Friends Provident International. Its
major advantages include flexible
withdrawals, which can be planned to coincide with, say, university payments or annual tuition bills, and a one-off
withdrawal facility.
In addition, lump sum premiums can be added at any time — there’s a tiered allocation structure that increases
growth potential and there are several flexible investment options as well.
Offshore savings plans are also an effective tool in any retirement planning strategy as they provide a disciplined framework to reach, and even
exceed, retirement goals by prudently putting away a fixed amount every month for the time when you stop working.
For your golden years
We have found that Zurich’s Vista policy is one such scheme that enables individuals to plan their future more easily. It lets you make regular or lump sum payments, and as a regular saver
you can increase or decrease the amounts, depending on your circumstances.
However, always check with your adviser what the impact of this move could be on the plan. Payments can be made through
credit cards, direct debit and cheques, or via other methods.
Other important features are that you can save in a wide choice of major currencies and Vista can be issued with joint names if desired. Also, you get a range of funds to choose from in different sectors and regions.
Similarly, Generali International’s
Vision plan typically empowers people to reach their financial goals. Its hallmarks are flexibility, value and choice.
Vision’s variable premiums allow you to increase, reduce or put on hold your regular payments or add a lump sum.
They also offer investment options
through a selection of more than 100 top-performing funds from leading providers to match a wide variety of investment profiles, as well as currency
choices with payments accepted in US dollars, pounds, euros or yen. You’re given bonuses as rewards for maintaining
regular payments to your account, and have constant access to information online.
An increasingly popular plan with our expat American clients is Trireme’s Explorer Retirement Scheme, which is
a supplementary overseas pension plan. Among other benefits, this pension scheme will allow a qualifying US expat
to make appropriate annual contributions out of post-tax earnings or personal capital to a pension fund above $51,000
(about Dh 187,325) — something that is otherwise not possible within the current US tax-approved regime.
It also creates enough room to take advantage of tax-deferred investment growth and to benefit from the opportunity to invest freely in Passive Foreign Investment Companies, without incurring US tax penalties and burdensome tax-reporting procedures.
The plans set out here are just a few of the regular savings schemes in the market for expats in the UAE. Each has its own merits and features, but what they all share is the ability to focus people’s planning strategies and commitment, which is vital as financial security and freedom are too important
to leave to chance.
— The writer is the Divisional Manager of deVere Group in the Middle East
