All smiles. British expat Mark Dutton with his family Image Credit: AK Kallouche/XPRESS

DUBAI: What are the odds that you will run out of money in your old age? Very high, according to Guardian Wealth Management (GWM) which conducted a survey of its 3,000 Gulf-based clients asking them about the type of lifestyle they hope to lead upon retirement and the percentage of their wage they put aside every month.

According to their findings released last week, three out of five (63 per cent) expats in the UAE will not have enough funds to maintain their desired lifestyle. People earning between Dh10,000 and Dh30,000 will be the worst hit as very few of them are able to set aside any money at the end of the month because of the high cost of living and expensive lifestyles.

Hamzah Shalchi, regional head, GWM, said even those who made between Dh40,000 and Dh60,000 per month were not saving enough, with 75 per cent putting less than one-fifth of their monthly earnings towards retirement.

“Most expats think they can live a life of opulence. But they lose touch with the importance of planning their future so they can lead a similar life of comfort and luxury when they stop working. Unfortunately, they will have a rude awakening when they realise they have not saved enough for their retirement,” said Shalchi.

Earlier, a survey by finance comparison site compareit4me found that fewer than half of UAE residents set aside funds from their monthly earnings for retirement or emergencies, over 30 per cent do not save a single dirham, while around 13 per cent feel life is too short to squirrel away money.

The Future of Retirement 2015 report released by HSBC paints an even darker picture.

The report which surveyed over 1,000 residents of various nationalities found that nine out of 10 residents didn’t have saving for retirement as a top priority.

British expatriate Mark Dutton who lives in a five-bedroom villa in Jumeirah Golf Estates said he had no clue where to put his money until he hired a financial manager.

Future tense

“I lead a certain lifestyle and own a number of holiday homes and properties in the UK and Portugal. The idea is to still have them in the future without any encumbrance, so I have started saving for retirement,” he said.

Another British expat, Eric Hardman, 52, a business development manager for a private firm in Dubai, said he barely saves any money. “Dubai is phenomenally expensive especially if you have a family living with you. Rent and school fees take up a chunk of my income. It is easy to spend in the UAE and unless you have some saving plans you could end up broke,” he said.

Indian expat Anand Jeswani, 44, who was born and raised in Abu Dhabi said the cost of living in the city has increased multifold.

“Expenses have gone up but salaries have not increased proportionately. I have taken savings and educational plans on the advice of a financial consultant.

“But looking at the way school and college fees are shooting I am not sure if this would be enough,” said Jeswani.

Top 5 must investment plans

Regular Savings: There are many plans available to maximize savings and it is a good place to park your money as they earn a compound interest.

Lump sums: Investing a chunk of your savings into a tax efficient structure will give you more earnings than putting it in a simple savings account.

Unlocking frozen pensions: This is especially for British expats as new rules have come into effect wherein people can invest their pension savings into other schemes.

Life Insurance: Life insurance should be a part of everyone’s financial planning especially for expats as their risk is heightened according to their country of residence.

Portfolio Balancing: It is important to regularly diversify your investment portfolio as it helps to ensure consistent and steady returns.

 

YOUSPEAK: How much do you save for retirement?