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 gentle on how residents are approaching monetary planning, notably by way of retirement.

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

Performed in January 2024, the survey lined 1,000 residents within the UAE, together with mother and father and married residents throughout numerous 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 have been extra optimistic about receiving a bonus this 12 months at 78%, adopted intently by Arab expats and Asians at 65%. Solely 54% of the Western expats surveyed have been hopeful of receiving a bonus in 2024. Whereas 32% anticipated a bonus of as much as AED20,000 in 2023, 77% count on a bonus of as much as AED25,000 in 2024.

Amongst respondents, saving for youngsters’s schooling stands out as the principle precedence for 37%, with vacation spending trailing intently 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 direction of retirement financial savings (30%), indicating a generational hole in monetary planning priorities.

Need to retire within the UAE

Nearly 7 in 10 categorical a want 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 direction of retiring within the UAE (89%), underlining a rising perception within the nation’s financial future, the attract of its dynamic way of life and profession alternatives, and difficult conventional notions of retirement overseas.

The surge in prioritizing retirement planning amongst people aged 45 and above, a lot of whom (42%) have referred to as the UAE house for greater than twenty 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 popular vacation spot for retirement, additional strengthened by latest authorities initiatives.

Funding developments and monetary planning

The survey reveals that solely 4% at the moment make investments by means of 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 belongings and a desire for investments perceived as steady 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 providers.

“Monetary planning is usually a daunting activity, if finished with out correct steerage. Searching for knowledgeable monetary recommendation repeatedly is essential, irrespective of the place you’re in your life journey. With the appropriate recommendation, people could make knowledgeable selections, getting one step nearer to assembly their monetary objectives,” mentioned Taru Singhal, Head of Retail Distribution, Zurich.

In relation to retirement objectives, the need to start out a enterprise emerges as the highest precedence for 44% of respondents, intently adopted by sustaining their present way of life at 37%. Nonetheless, issues about monetary consolation in retirement stay prevalent, with 61% of respondents expressing apprehensions about their monetary state of affairs post-retirement.

In keeping with the survey, 22% of the respondents mentioned that saving 16-20% of their wage could be adequate to allow them to realize their monetary objectives, in comparison with 31% who felt that saving between 6-15% of their revenue was sufficient.

“Residents are actually seeking to retire as early as 50. Our newest survey reveals that 73% of working people within the UAE purpose to retire between the ages of fifty and 65. The sooner you intend to retire, the extra necessary it turns into to plan forward, ideally by means of a devoted financial savings plan, to make sure a steady monetary future,” mentioned 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 threat and have 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 a giant chunk of their bonuses on holidays and investments in belongings like gold and actual property, it’s important to emphasise the vital nature of long-term monetary safety, notably by means of devoted retirement financial savings. As residents ponder their monetary futures, prioritizing retirement planning and in search of skilled recommendation is instrumental in making certain a cushty retirement right here within the UAE.