New survery finds a shockingly high 61% have no long-term savings at all.
Dubai: Nearly half (45 per cent) of expat employees in the UAE either have no plans to ensure an adequate standard of living after retirement or plan to work beyond the retirement age to ensure continued income, said a new study.
According to a ‘2020 UAE Security and Savings’ survey by global consultancy, Mercer, a lack of financial awareness among respondents with 61 per cent reporting no long-term savings at all and 43 percent expecting their end of service benefits to meet their long-term financial needs.
“The number of expat employees in the UAE who are not prepared financially for retirement is very concerning. Employees must understand that the current end of service benefits are far from enough to ensure an adequate standard of living post-retirement,” said Tarek Zouiten, Retirement Business Leader at Mercer UAE
Under the current programme, serving a company for 25 years will only provide two years of basic salary, however, an average person will need 12 times their total salary to maintain a decent standard of living post-retirement.
“Ensuring UAE expats are better prepared for post-retirement challenges will require a fundamental mind shift among employees which can be achieved with financial education and progressive regulations like the DIFC Employees Workplace Savings Plan (DEWS) recently employed in DIFC,” said Zouiten.
The study, which surveyed 50 senior decision makers and 500 workers based in the UAE, was conducted to gain a better understanding of the financial concerns and needs of employees in the country and provide an insight into the range of benefits that workers currently have access to through their employers.
Need for saving schemes
According to the report, only 24 percent confirmed access to pension or saving schemes with their current employers. Furthermore, four out of five employees perceived a lack of concern from their employers about their financial wellbeing, resulting in lower satisfaction and loyalty levels.
The Mercer survey also found that 99 percent of UAE employees expressed the need for improved savings and investment benefits, while 81 percent claimed they would be less likely to leave their current employer if they were offered such benefits.
Although employers recognise the importance of offering enhanced benefits, the key impediments include the belief that employees are better off making their own financial decisions and the lack of resources to manage such benefits. UAE employers also continue to view tax-free salaries, medical insurance and enhanced end-of-service benefits as the top employee benefits.
