UAE Retirement Aspirations Under Threat Due to Lack of Savings

  • 46% of UAE residents hope to retire before the age of 60, while 39% expect to be in retirement for at least 20 years
  • 63% are not confident they are saving enough for retirement
  • 81% want their employer to help them prepare for retirement

The retirement aspirations of many UAE residents are under threat due to a lack of retirement planning, according to research and analysis released today by Zurich International Life.

According to a survey of 1,021 UAE residents by YouGov, 46% hope to retire before the age of 60. Zurich’s survey also finds 36% of respondents expect to live in retirement between 10 and 20 years with another 39% expecting to be retired for over 20 years.

UAE Retirement Aspirations Under Threat Due to Lack of Savings
Meanwhile, the survey finds only 56% of UAE residents have a retirement plan; either a personal or company pension. Western expats are most likely to have a retirement plan (68%) and Arab Expats least likely (50%).Early retirement aspirations and longer life expectations mean the retirement savings pot needs to be greater than ever. However, Zurich’s research discovers 63% of respondents are not confident they are saving enough for retirement; this figure rises to 75% for Arab expats who are the most concerned about their pension provision and is lowest among Western expats (52%).

UAE Retirement Aspirations Under Threat Due to Lack of Savings

Employers can help employees to fulfil their retirement aspirations“People naturally aspire to retire early and spend the twilight years of their lives relaxing away from the stresses of employment. But unless you have saved enough to cover your retirement expenses, you will either have to work longer or face the possibility of surviving with a lower standard of living than previously desired,” said Peter Cox, Head of International Pensions at Zurich International Life.

The research points to an imbalance between retirement aspirations and the likely reality among many UAE residents.  It also finds 81% of respondents are looking to their employers to help them financially prepare for retirement.

UAE Retirement Aspirations Under Threat Due to Lack of Savings

Cox believes employers should play a greater role by facilitating the opportunity for their employees to save for retirement in a cost effective manner.

“People across the UAE are concerned they are not saving enough towards their retirement and employers are in the best position to support them,” says Cox.

“Our research shows employees want their employers to help them prepare for retirement. In other developed economies, a corporate retirement savings plan is an accepted part of an employment package. Currently in the UAE it is not, but employers should listen to their employees and support them in achieving their retirement aspirations.

“Forward-thinking companies that respond to this need will become ‘employers of choice’ and rewarded with the ability to attract and retain top talent,” added Cox. 

Over reliance on property to fund retirement savings

Zurich International Life’s research also finds that nearly one third of UAE residents (31%) plan to rely on property as their main source of retirement income. Western expats (35%) and Asian expats (33%) are most likely to be reliant on property. Emiratis are least likely to require income from their property (25%) and are the only nationality not to state property as their main source of retirement income; government pension was ranked first (40%).

Across all respondents, almost one-in-five (18%) said a government pension will be their main source of retirement income; 17% will rely on savings in the bank and 8% hope their inheritance or other financial support from their families will support them through retirement. Only a quarter will use a personal pension (17%) or company pension (10%) as their main retirement funding method.

“An over-reliance on property as the main source of retirement income is a risky approach as people will always need a roof over their heads,” explained Cox.

“Even if the retirement income is derived from a second home, selling a property, particularly during a downturn, can be difficult. This makes property a very illiquid asset. Rents can be volatile, maintenance costs can spiral, while there is a risk of the property lying vacant.”

UAE Retirement Aspirations Under Threat Due to Lack of Savings

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