UAE residents warned on careless spending
Dubai, November 28, 2012
United Arab Emirates residents risk an uncertain financial future if they continue with a “live for the moment” mentality, said a report issued by Nexus Insurance Brokers, a leading financial firm in the GCC.
The trend for spending without forethought was detailed in the recently published 2011 National Bonds Saving Index, which found that 87 per cent of UAE residents surveyed did not believe their savings were adequate for the future.
Only 1 per cent of UAE residents felt their savings were "more than enough" for the future.
According to the Arab Monetary Fund, the UAE has an average individual spend per year of around Dh79,252 ($21,571) per annum – the highest in the region.
“While there is absolutely nothing wrong with enjoying life, the longer you forge ahead without a financial or retirement plan in place, the longer you will regret the missed opportunity to take decisive action when you were best able to,” said Peter Ellen, operations director, Nexus Insurance Brokers.
Nexus Insurance Brokers, which regularly raises awareness across the region about the dangers of living without a solid financial plan through road-shows, seminars and industry thought-leadership, advises concerned residents to start with a simple question: “What quality of life do I want when I retire?”
While there are a number of ways to save for retirement, Nexus believes key is to accumulate enough money to provide a comfortable retirement income.
“Your savings should not just be geared towards mere survival, but aim to support the lifestyle to which you have become accustomed to – or aspire to,” said Ellen.
UAE expats may consider saving into a financial product with the flexibility to increase the amount they save as required, as well as allowing them to continue saving into the financial product in the event that they leave the country, he added.
It is also important to regularly review the level of risk associated with each financial product, as individual attitudes and circumstances can change over time, the report said.
High risk at a young age can yield high returns, but it may be more prudent to shift to safer options as old age sets in.
“Consider all your options and then consider them again,” added Ellen.
“Speak to an independent financial advisor to determine your comfort levels. There are a huge array of regulated savings plans to choose from in the UAE and it is important to be completely aligned with your individual circumstances.” – TradeArabia News Service