Residents across the UAE have expressed their hopes of saving more in 2018, as compared to the previous year, new research by National Bonds Corporation has shown.
National Bonds Corporation's 2017 Savings Index found that 57 percent of savers plan to increase their savings in this year, compared to 64 percent in 2017. In addition, 41 per cent of savers in the UAE are planning to start their savings journey in 2018. The data also showed that 85 per cent of respondents still feel that they are still not saving enough for their future.
Despite this, the UAE also saw an increase in the number of respondents who feel that they are saving enough, which is four per cent higher than in 2016.
"While it is not surprising to see that residents in the UAE are not saving as much as they believe they should, it is interesting to see the disconnect between the intent to save and the numbers of people saving year-on-year," said Mohammed Qasim Al-Ali, CEO of National Bonds Corporation.
"The UAE has the largest portion of regular savers in the GCC and I am confident that we will continue to lead the way in this area if we keep striving to raise awareness of the importance of saving. If people realise the key role which savings plays in securing a happy future, everything else would fall in its place," he added.
Interestingly, 68 percent of those surveyed in the UAE claimed their financial stability contributes their overall happiness. The report also found measurements for overall happiness included taking out health insurance, life insurance and saving enough to put their children through university. When pushed on why respondents felt it was a good time to save, 43 percent of UAE residents cited better investment opportunities, a 36 percent increase from 2016.
Anurag Chaturvedi, managing partner at Chartered House Tax Consultancy, noted that residents in the UAE are finding it harder to save in 2018. The introduction of the value added tax (VAT), he pointed out, has resulted in an increase in prices that has made saving difficult.
"The VAT is inflationary in most of the household spending, and has raised the cost of living by over five per cent. This inflation has reduced the saving appetite of an individual, and has also had a bearing on the business, as consumers reduced the ticket size of their spending," he said.
"The IMF has predicated global activity will gain momentum in 2018, and with the growth predicted here in the GCC, the savings environment looks set to increase in 2018. The more money people have, the more they should be saving. It is as simple as that," Al-Ali added.
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