Forty four percent of UAE residents want to retire from their jobs before they turn 55 and 63 percent by the age of 60 yet 45 percent of the employees haven’t begun saving for retirement, a survey by insurance company Friends Provident International (FPI) found.
Forty percent of respondents said they would begin saving 10 years or less before retirement and 53 percent of those who save put their money in conventional bank deposits, FPI survey which polled 1000 people, revealed.Â
Twenty seven percent respondents felt they can retire on less than US$ 2,500 amount per month, while the same proportion thinks US$ 5,000 will suffice. Another 15 percent admit that they had no idea about an adequate monthly retirement amount for them.
The survey, however, found that the younger people have a more realistic view of retirement. Most respondents aged between 18 to 24 years said they will start saving between 15 and 20 years before retirement with some saying they will do it between 20 and 25 years ahead.
The survey emphasized the importance of financial planning and professional advice for the people planning their retirement.
The UAE retirement income system was ranked first in the Arab world and 22nd globally in the 13th annual Mercer CFA Institute Global Pension Index, which included the UAE for the first time. Iceland took top spot followed by the Netherlands, while Thailand was ranked last, according to the index which benchmarks 43 countries, among them long-standing pension systems such as the US, France and Spain.
The UAE has achieved favourable sustainability outcomes due to its high percentage of labor force participation, particularly among those over 55 years old. The state has established a good framework for an Emirati pension system involving the public and private sectors. Additionally, the governance structure of the UAE’s national pension system has a high integrity rating.
In March, Dubai Secretary General of the Dubai Executive Council and chairman of the steering committee overseeing the pension system Abdulla Al Basti announced that Non-Emirati employees working in the government and public sector will be enrolled in the emirate’s new savings retirement scheme in phases.
The retirement plan, he said, will play a crucial role in enhancing the economic and social stability while strengthening the emirate’s position as a financial centre. The system will be in addition to the end-of-service gratuities that all employed residents are entitled to after completing at least one year of service.
For foreign employees working in the emirate’s public sector, the savings scheme will be enrolled by default, and the employer will contribute the total end-of-service gratuity from the date of employment.
Dubai’s government savings scheme will offer expatriate employees an array of capital protection investment options, including Sharia-compliant options.
Employees can choose to save all their money in one investment portfolio. Alternatively, they can spread their savings across a range of investment portfolios, from low to high risk.