Dubai: Most people move away from home to make more money and save for retirement, but many of them tend to forget their original aspirations once they settle into their new life.
According to a new research from AES International, more than half of expatriates from the United Kingdom (UK) alone are realising that they have not increased the amount they save each month since they moved abroad.
With their savings low, about six in ten (67 per cent) are now worried they will not have enough money to spend for their needs when they retire. They are also concerned that they are spending more than they should have.
Money experts said the problem affects not just British expatriates, but most people, including Asian and other European nationals who are based in the UAE.
As to why many people fail to save despite earning a higher income, experts said people tend to fall into temptations and end up procrastinating their goals.
Among the respondents polled for the survey, 34 per cent admitted that they are actually spending more now on socializing than they were back home.
“Failing to save is not a unique problem of British expats. Moving abroad can sometimes create the illusion of being on holiday, especially for expats moving to low-tax jurisdiction countries such as the UAE. Increased social obligations, as they begin to integrate into their new surroundings and make friends, can often result in increased spending,” Sam Instone, chief executive of AES International, told Gulf News.
“The key for all nationalities is to begin with the right foundations which in our experience is choosing the right offshore bank account into which you can save and invest with flexibility and at low cost. The right platform on which to build gives innumerable benefits that stop expats making the mistake we have seen again and again.”
The financial services organisation came up with the findings after polling 25,000 British expatriates in different countries around the world, including the UAE, in June 2015.
Instone said it is a good idea for expatriates to open an offshore bank account, where they could keep their savings without having to worry about huge tax charges.
“Most people tend to move away from their home country for a combination of reasons, but high on the list is usually an increased salary. However, once people find themselves in what feel like a holiday atmosphere, original aspirations to save can become clouded by the temptations of the here and now,” Instone said.
“People are also prone to procrastination and this is well demonstrated by their savings habits.”
Instone said they are not insisting that every expatriate should hire a financial adviser to help them manage their finances properly. He said there are other “simpler and cheaper” options to save than going through an expert.
“We would urge people to consider at least setting up an offshore bank account. In this way, expats will be able to save in a tax efficient manner and, with some discipline, reach the goals they originally had in mind.”