Amidst heightened consumer caution, clearing debts is being given ample attention by UAE residents. Image Credit: Shutterstock

Dubai: Got your bonus?

A sizeable number of UAE employees who have got their bonus plan to use it to clear off their debts – if they haven’t already decided to set it aside for investments. A lesser number would rather use it for their next holiday spend – or buy a luxury item they had their eyes on. This is according to a new survey by YouGov and commissioned by Zurich Insurance.

The findings – and the emphasis on clearing debts – echoes strongly with UAE consumer sentiments these days. Rising interest rates have made it a priority for them to lower their loan exposure or clear it off completely. This is where a bonus can come in handy.

The top priorities, according to the Zurich survey, for UAE residents in utilizing their bonus include investing in property (24 per cent), retirement savings (17.6 per cent), debt pay offs (15 per cent), and saving for children’s education (14 per cent). Other choices such as funds investment (13 per cent) and life insurance (11 per cent) were also ‘seriously considered as viable options by residents’.

The survey polled 1,200 residents during January, and nearly half of them had received a bonus for their performance in 2022. And 31 per cent received payments of up to Dh20,000 and 12 per cent up to Dh50,000. (For 5 per cent of those polled, the take home was in excess of Dh50,000.)

Demographics matter

In what may come as a surprise, Gen Z and Millennials are taken up with the need to start setting aside part of their income generated for a retired life. The Zurich poll found 42 per cent of 18-24 years olds as being ‘largely enthusiastic’ about this. (In many ways, the pandemic experiences would have shaped a lot of their thinking on this score, as would the current high inflation and steadily rising trajectory of interest rates.)

When it comes to those 45 years and above, 22 per cent of UAE residents polled said investing in life insurance was a top priority. Priorities were also governed by nationality - investing in property (24.7 per cent), saving for retirement (17.4 per cent) and saving for children’s education (14.8 per cent) topped the list for Asians in the UAE. In comparison, property (21 per cent), paying off debt (19.2 per cent), and saving for retirement (18.8 per cent) ranked top for Emiratis and Arab expats respectively.