Over half (53%) of UAE residents had to cut their non-essential spending in the past six months in order to cover expenses, and more than three-fourths (77%) are likely to continue doing so in the future.
YouGov’s latest report ‘On the money: Global banking & finance report 2021’ provides a high-level analysis of consumers’ attitudes to financial services across 17 global markets. The white paper is based on more than 18,000 interviews and explores payments, investment, ethics in banking and marketing as well as touching on how the Covid-19 crisis has affected financial services worldwide.
In many of the surveyed markets, a majority of people have cut down their non-essential expenditure in past six months. This is the highest in Indonesia- at 72%, followed by Italy (56%) and Mexico (55%). Germany and Denmark are at the bottom of the list where less than a third claim to have done it (28% and 20% respectively).
In order to manage future finances, a majority of consumers across all markets are likely to continue cutting non-essential costs in the future as well, except for Germany and Denmark (46% and 45%, respectively) who sit at the bottom of the list.
The pandemic dealt a heavy blow to economies worldwide leading to widespread income losses and pay-cuts. When asked about their household situation in the past six months, a third of UAE residents (34%) said they have dipped into their savings to cover expenses. 28% have been able to save more but a fourth (24%) have borrowed more money or taken on debt to manage the situation.
When questioned about their financial priorities in 2021, a significant proportion of consumers in each market said saving money for unexpected hardships is their top financial goal. In the UAE, two in five (41%) consumers have made it their priority for 2021.
Looking at the other goals, 37% UAE residents would like to ensure adequate protection for their families and themselves in case of emergencies, and three in ten (30%) want to fulfil their regular financial commitments. Around a fourth want to pay off their debts, invest their money or save money for retirement. Even though saving appears to be the main goal of 2021, few residents (15%) intend to buy a property or purchase assets (10%) in the new year.
It is interesting to note that even though debt ratio in the UAE is one of the highest across the 17 markets, paying off debts is at a lower priority among residents, perhaps because saving and securing their families is the main goal of 2021.
In addition to highlighting the changing consumer behavior during the pandemic, the paper uncovers public perspective towards cash and payment technology. In most of the surveyed markets including UAE (70%), a vast majority of people prefer to use contactless modes of payments wherever possible.
The European nations in the study have largely accepted contactless payments– except for Germany, where cash appears to be a more prominent means of payment.
Talking about the Global Banking & Finance Report 2021, Scott Booth of YouGov said, “The Covid19 pandemic has affected people’s financial lives in various ways leaving many out of work and facing considerable financial stress. The data suggest this year UAE residents’ priorities are focussed on home and family. They are likely to save more rather than spend or accumulate debt. In order to make consumers feel more secure about their future, it is critical that banks and financial institutions understand the priorities of customers and extend offerings that are likely to make recovery smoother.”
-- Tradearabia News Service
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