92% of those polled for the latest Savings Index plan to start their savings journey in 2019, up from 73.5 per cent last year
77% stated personal savings to be very important to them
43% of residents hoped they could save more
Need to educate people on the importance of savings is critical, says National Bonds CEO
In a world plagued with insecurities, the importance of regular savings cannot be stressed enough, allowing one to remain financially secure and providing a safety net in case of emergencies. In the UAE, more residents have resolved to start saving money this year, according to the latest Savings Index from National Bonds.
Savings trend rises
Ninety-two per cent of those polled for the leading Sharia-compliant Savings and Investments organization in the UAE latest Savings Index plan to start their savings journey in 2019, up from 73.5 per cent last year. Of this, up to 39 per cent plan to start their savings in the first six months of the year, while 19 per cent of residents plan to stash away cash within six to 12 months.
The index, which first launched in 2011, is central to National Bonds' efforts to instill a culture of savings in the UAE.
The 2018 index comes at a time when UAE residents are struggling with the rising cost of living, with rising expenses being cited by 49 per cent of poll respondents as the reason for not being able to save.
Despite this, the largest proportion of UAE residents are positive about the country’s savings environment with 52 per cent stating it is a good time to save. Besides, a significant drop in rents across the UAE means that there is more disposable income to save.
Mohammed Qasim Al-Ali, CEO, National Bonds, says, “The 2018 Savings Index highlights that the UAE offers an atmosphere that is conducive to creating a culture of savings. Having said that, the need to educate people on the importance of savings is still critical."
“The UAE continues to enjoy the largest proportion of regular savers in the GCC and I am confident that we will continue to lead the way in this area if we strive to raise awareness levels on the importance of saving. With up to 92 per cent of respondents planning to save this year, the urge to save exists, we just need to foster and build this appetite.”
As part of a drive to raise awareness on savings, more than 130 companies in the UAE participated in 400 financial workshops as part of the Employee Savings Programme (ESP), with more than 179,000 transaction made since launching the programme.
“The UAE continues to enjoy the largest proportion of regular savers in the GCC and I am confident that we will continue to lead the way in this area if we strive to raise awareness levels on the importance of saving. With up to 92 per cent of respondents planning to save this year, the urge to save exists, we just need to foster and build this appetite," says Al-Ali.
Harder to save
While a culture of savings exists, only a small percentage of the UAE’s expansive expat community seems to have saved as much as they had hoped. While 51 per cent of the total respondents claimed to save regularly and 77 per cent stated personal savings to be very important to them, only 23 per cent of expats who moved to the UAE for savings purposes were positive about saving as much as they hoped, while 42 per cent were somewhat convinced that they had saved enough. In fact, up to 68 per cent of total respondents including UAE nations and expats believed that it was becoming harder to save and 43 per cent hoping that they could save more.
“Perceived barriers to saving including expenses, loans and a poor knowledge about savings instruments are drawbacks,” says Al-Ali. “However, a positive view about the economic environment being conducive to saving balances this out and will help financial institutions to approach residents with suitable instruments that promote a culture of savings.
Educate residents on savings
“We are long-time supporters of the Government’s ambition to increase financial literacy and remain committed to growing the number of savers in the UAE,” says Al-Ali, “helping achieve a healthy and secure financial future for individuals and their families. Studying the 2018 Index, the opportunity for us at National Bonds to educate residents and nationals alike on how to save is huge.”
National Bonds (NBC), the UAE’s leading investment firm launched the 2018 Savings Index. Launched in association with market research firm Sondos, the annual survey seeks to provide information on the savings environment of the UAE and the GCC.
If you are looking for savings instruments from National Bonds visit www.nationalbonds.ae