The HSBC bank canvassed more than 15,000 customers in 15 markets for The Future of Retirement: A New Reality Survey – of which, nearly one thousand respondents were in the UAE.
The survey reveals that more than 50 per cent of UAE residents are not regular savers and holds a proclivity to resort to extreme measures when under financial constraints.
“Women appear to be more concerned about maintaining their retirement savings, compared with men in the UAE and seem less likely to dip into this fund, when they are financially constrained,” says Gifford Nakajima, regional head of wealth development at HSBC Bank Middle East Limited.
“It is also interesting to note that men are less proactive when coping with unforeseen circumstances. However, this attitude can grow to be a significant problem, as it will put more pressure on them in the future,” he adds.
Moving into a smaller home was among the alternative coping mechanisms, according to the report, which also revealed gender contrast. More than one in five women (22 per cent) would consider downsizing to deal with financial difficulties, compared with 16 per cent of men.
The report discloses the financial strain that home ownership is placing on today’s savers, with nearly 45 per cent saying that buying a home or paying a mortgage has a significant impact on their abilities to save for retirement. Bricks and mortar is just one of the sacrifices that people would consider making, if their financial situation demands it.
Nearly 24 cent of respondents says that they would consider selling their valuables, if they need money. As observed earlier, 30 per cent of women would be willing to consider this step, compared with 20 per cent of males. Others would consider borrowing to avoid parting with their assets: 12 per cent would borrow money and 14 per cent would ask family and friends for help.
Women react proactively when dealing with unforeseen financial hardships, as nearly 40 per cent would look for better jobs to earn more money, while only 28 per cent of men would consider the same move.
“While these differences between the financial planning habits of men and women are surprising, the predominant lack of saving plans across the UAE is troubling,” adds Nakajima.
“Although erratic saving habits are understandable, given the unstable economic environment over the past few years, it is essential that both men and women significantly alter their current habits and adopt a more formal attitude towards financial planning. This is especially important, if they do not want to continue working indefinitely and retire comfortably.”
The importance of starting early retirement planning is underscored in another study by HSBC, in which nearly half of the retired people (46 per cent) surveyed globally believe that they have not achieved their hopes and aspirations for retirement, because they have less money to live on than they expected.
Another report in the Future of Retirement series looks at the sentiments of people in retirement globally and shows that nearly two fifths (38 per cent) have not prepared adequately for this phase of their lives.
One in eight among those surveyed don’t expect to retire completely and their expectations for a work-free retirement drop significantly as they grow older. Approximately 17 per cent of 55 to 64 year olds expect to work indefinitely, compared with just ten per cent of 25 to 34 year olds.
Thursday, September 19- 2013 @ 0:00 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.