Panicking about the future? Perhaps you should be…

This is an inflammatory title but sometimes it’s important to get people’s attention and a reaction. The plain fact is that the vast majority of people are woefully underprepared for retirement and are simply not saving enough for their later years. And if you don’t deal with the matter, who will?

money-timebombOver the past year or so both HSBC International and Scottish Widows, part of the UK based Lloyds Banking Group, have released the results of surveys that show the parlous state of people’s retirement planning. The surveys make worrying reading and at the risk of sounding dramatic the situation is now a time bomb.

The HSBC survey was based on a globally representative group of people, largely expats of various nationalities and the Scottish Widows survey was UK based. The results are broadly similar to it is not unreasonable to extrapolate the finds across the developed world.

The simple fact is that we are not saving sufficiently for our futures. As we live longer and have more active years, more money is required to support ourselves in these years. Even where State pensions are available, and you are eligible to receive one, the amount you will get is likely to fall far short of what you will actually need to live comfortably, let alone to be close to what you would actually want as an income. The HSBC survey stated that ‘expats are dangerously unprepared for retirement’.

Many people attribute their lack of savings to the fact that retirement is ‘too far away to retirement pot 3worry about’ – a perception that perhaps explains why the UAE is the joint highest globally in putting off saving for retirement, with people beginning to save at an average age of 30. Worryingly, UAE residents also believe that they can put off their savings as late as the age of 37 and still expect to maintain the same standard of living they currently enjoy.

UAE residents also rely heavily on cash savings in their retirement rather than diversified savings, with 57% expecting cash savings to be their most important source of income at that stage in their life. With the current low rates of interest not expected to improve and even with the stock market volatility of recent years, equities tend to produce better returns than cash and often property too, when managed properly.

This lack of planning will leave millions of people facing a drastically reduced standard of living in later life, a sentiment that is reaffirmed by the fact that UAE respondents typically expect their retirement to last 15 years, whilst their savings for retirement will only last them nine years on average.

Whilst there are always people with financial difficulties, many expats have moved to the UAE for a better standard of living and many are no longer paying tax on their earnings so should be able to save significant sums over time. There are numerous ways this can be done, but you have to do something!

While the findings do not bode well for the future, there were encouraging results for respondents that have taken the initiative to get professional financial advice. It has been shown that people who take professional advice typically have about 50% more in retirement savings than those who have not benefited from such guidance.

Like the majority of people, you are probably underfunded and under prepared, so take a moment to panic…  and then start taking action.

Look at what savings and investments that you have already. Are these working for you? Are your existing investments and pensions invested suitably and are they being regularly reviewed? Do you know what you have accrued already? Whatever the situation, there is a high probability that you could benefit from unbiased professional advice so that you can strike a happy balance between living now and planning for the future.

For unbiased advice contact me at

About FinancialUAE

A qualified and experienced Independent Financial Adviser based in Dubai, UAE. Professional and ethical. Freelance writer on personal financial issues & the On Your Side column in The National. Founder of Facebook group British Expats Dubai. Senior Partner at Holborn Assets LLC, Dubai, UAE.
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1 Response to Panicking about the future? Perhaps you should be…

  1. thetaxteddy says:

    I share your concern – I find that almost no clients are contributing to a pension of any sort these days. Compared to the 1980s when everyone was piling into personal pensions. Just shows how much trust has been lost.

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