UAE Residents to Spend 2024 Bonus on Retirement, Real Estate

Because the UAE’s workforce eagerly anticipates their annual bonuses, a latest survey by market analysis firm YouGov, commissioned by Zurich Worldwide Life, a part of Zurich Insurance coverage Group (Zurich), sheds mild on how residents are approaching monetary planning, significantly when it comes to retirement.

The findings underscore a shifting panorama the place saving for retirement competes with different monetary priorities, urging people to rethink spend their bonus in a bid to satisfy their monetary targets.

Carried out in January 2024, the survey coated 1,000 residents within the UAE, together with mother and father and married residents throughout varied revenue teams, nationalities, occupations, genders and age teams.

Bonus expectations throughout demographics

The survey reveals that 68% of respondents anticipate receiving a bonus this 12 months, in comparison with 48% in 2023, marking a notable improve from final 12 months. Among the many nationalities surveyed, Emiratis had been extra optimistic about receiving a bonus this 12 months at 78%, adopted carefully by Arab expats and Asians at 65%. Solely 54% of the Western expats surveyed had been hopeful of receiving a bonus in 2024. Whereas 32% anticipated a bonus of as much as AED20,000 in 2023, 77% anticipate a bonus of as much as AED25,000 in 2024.

Amongst respondents, saving for kids’s training stands out as the primary precedence for 37%, with vacation spending trailing carefully at 34%. In distinction, solely 22% prioritize saving for retirement, reflecting a decline in comparison with final 12 months (34%). UAE residents over the age of 45 years exhibit the next inclination in the direction of retirement financial savings (30%), indicating a generational hole in monetary planning priorities.

Want to retire within the UAE

Nearly 7 in 10 specific a need to retire within the UAE, reflecting confidence within the nation’s long-term prospects. Notably, youthful UAE residents between 18-24 years present a robust inclination in the direction of retiring within the UAE (89%), underlining a rising perception within the nation’s financial future, the attract of its dynamic life-style and profession alternatives, and difficult conventional notions of retirement overseas.

The surge in prioritizing retirement planning amongst people aged 45 and above, lots of whom (42%) have known as the UAE residence for greater than 20 years, underscores a rising understanding of the significance of securing your monetary future. That is influenced by a deep-rooted attachment to the UAE as a most well-liked vacation spot for retirement, additional strengthened by latest authorities initiatives.

Funding developments and monetary planning

The survey reveals that solely 4% at present make investments by a retirement financial savings plan, with a majority choosing gold (50%) and actual property (47%). The dominance of gold and actual property investments suggests a cultural affinity for tangible property and a desire for investments perceived as secure and appreciating over time.

Regardless of the significance of retirement planning, a staggering 61% haven’t thought of in search of monetary recommendation, suggesting a spot in monetary literacy and preparedness. This discovering underscores the pressing want for enhanced monetary literacy programmes and accessible advisory companies.

“Monetary planning is usually a daunting process, if executed with out correct steering. In search of skilled monetary recommendation repeatedly is essential, irrespective of the place you might be in your life journey. With the proper recommendation, people could make knowledgeable choices, getting one step nearer to assembly their monetary targets,” stated Taru Singhal, Head of Retail Distribution, Zurich.

In relation to retirement targets, the will to begin a enterprise emerges as the highest precedence for 44% of respondents, carefully adopted by sustaining their present life-style at 37%. Nevertheless, issues about monetary consolation in retirement stay prevalent, with 61% of respondents expressing apprehensions about their monetary scenario post-retirement.

In line with the survey, 22% of the respondents stated that saving 16-20% of their wage can be enough to allow them to attain their monetary targets, in comparison with 31% who felt that saving between 6-15% of their revenue was sufficient.

“Residents at the moment are seeking to retire as early as 50. Our newest survey exhibits that 73% of working people within the UAE intention to retire between the ages of fifty and 65. The sooner you propose to retire, the extra vital it turns into to plan forward, ideally by a devoted financial savings plan, to make sure a secure monetary future,” stated Taru.

The survey additionally revealed a notable divergence in funding methods between age teams the place 56% of youthful people (18-34 years) confirmed the next tolerance for danger and had been in favour of non-traditional investments. Compared, older respondents (45 and above) favoured conventional funding avenues (63%) and prioritized safeguarding retirement funds (22%).

In conclusion, the survey paints a nuanced image of the UAE’s monetary panorama, emphasizing the necessity to re-evaluate bonus spending and retirement planning. Whereas most residents spend an enormous chunk of their bonuses on holidays and investments in property like gold and actual property, it’s important to emphasise the vital nature of long-term monetary safety, notably by devoted retirement financial savings. As residents ponder their monetary futures, prioritizing retirement planning and in search of skilled recommendation is instrumental in guaranteeing a cushty retirement right here within the UAE.