(MENAFN- Khaleej Times) Personal savings trend among residents in the UAE is on the upswing with a majority of respondents in a survey expressing their desire to increase savings while a significant minority of non savers planning to join the bandwagon, National Bonds Corporation, or NBC, said on Wednesday.
Mohammed Qasim Al Ali speaking at the launch of the 2014 Savings Index in Dubai. - Supplied photo
The survey reveals that 62 per cent of savers in the UAE plan to increase their savings in the next six months, while 35 per cent of non-savers plan to start saving during the same period.
"Among savers in the UAE, 74 per cent Emiratis and 64 per cent Arab expats are most keen to increase their savings in the next six months," Mohammed Qasim Al Ali, chief executive of NBC, said at the launch of 2014 Savings Index for the UAE.
In short, the intention to save emerged as a top priority for a majority of those surveyed in the UAE, NBC said.
The index reveals that 77 per cent of the UAE's savers polled do not believe their current savings are adequate for the future, while nine per cent indicate an improvement in sentiment towards saving over the same period in 2013.
The survey shows that 22 per cent of the respondents surveyed admit to saving a little more in comparison to the same period last year (an improvement of four per cent from 2013) and 31 per cent of the residents claim they are saving about the same as last year (an improvement of three per cent over 2013).
The study also shows that the majority of survey respondents in the UAE disburse a significant portion of their expenses on house rents and utility bills. The study indicates that over half of the respondents in the UAE have loans, with the majority paying out either one or two loans.
The study reveals that the country's savings environment has remained unchanged with 26 per cent of the UAE's residents claiming the year 2014 as a good time to save. Westerners and Emiratis in the UAE showed the most positive sentiment across nationalities with 38 per cent and 34 per cent respectively, stating it is a good time to save, with no major difference across genders.
The majority of the UAE's residents - nearly 87 per cent - believe their financial status will remain the same or become stable in the next six months, indicating a minor increase of three per cent compared to 2013. About 54 per cent of the respondents listed inflation and high costs of living as key factors that impact their current annual savings plan, while 48 per cent state unexpected expenses as the primary reason.
Among the low-income category, 36 per cent of those polled in the UAE admit to saving regularly - marking a five per cent improvement over 2013. While 55 per cent of the savers in this category admit to saving less than 10 per cent of their income, 14 per cent claim to save 30 per cent of their monthly income.
Meanwhile, 39 per cent of the respondents said they saved as much as planned, 10 per cent claim to have saved much less than planned and another 8 per cent admitted to saving more than planned, registering an increase of 4 per cent over 2013.
Al Ali said the savings index results are clearly indicative of negative market factors inhibiting segments of the UAE population from developing a healthy savings habit and achieving financial stability.
The survey found that elsewhere in the GCC region, particularly in Saudi Arabia, the overall sentiment has improved from 2013 by five per cent with 27 per cent of respondents claiming this is a good time to save while 31 per cent remain neutral and 42 per cent admit that 2014 is not a good time to save.
In other GCC countries, about 26 per cent of respondents surveyed say this is a good time to save reflecting a two per cent improvement over 2013. Meanwhile, 42 per cent remain neutral and another 32 per cent believe this is not a good time to save given the prevailing economic situation.
Savings accounts with banks have emerged as the most popular savings option in the UAE, Bahrain, Kuwait, Oman and Qatar, while 43 per cent of all respondents in Saudi Arabia use current accounts in banks for saving.
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