National Bonds Corporation announces 2015 Savings Index for the UAE

DUBAI 11th April 2016 (WAM) -- National Bonds Corporation the leading UAE company specialised in a unique and investment Sharia compliant programme has released its 2015 Savings Index findings based on a survey conducted among 2000 respondents in the GCC region.

Compiled by Sondos Market Research the survey aimed to gain feedback on three key areas: financial stability potential of saving and existence of an enabling saving environment in their respective countries. Out of the total sample size nearly 700 comprised UAE residents of Emirati Arab Western and Asian nationalities.

In key outcomes the UAE results indicate a significant increase in potential for saving and an overall positive outlook on financial stability in the nation.

More specifically 84% of the respondents in the UAE admitted to being financially stable. Of the 63% that expressed intent to increase their savings 53% comprised UAE nationals 60% Arab expatriates 86% Asian expatriates and 52% were Western expatriates. Only 6% of the respondents said they do not have any saving plan yet while 50% of UAE nationals and 65% of Asian expatriates said they plan to start saving and 21% of Arab expatriates indicated no interest in starting a savings plan.

An increased 30% of the respondents in the UAE regarded 2015 as suitable for saving compared to 26% in 2014. While 36% of UAE nationals and 34% of Asian respondents thought 2015 was suitable for saving 35% of Arab expatriates thought 2015 was unsuitable for saving and 61% of Western expats preferred not to answer.

Responding to questions on why 2015 was a good year for saving 44% of the respondents cited better available investment opportunities in the UAE. On the flip side 45% said that high living expenses and inflation were the main reasons that 2015 was not suitable for saving. Interestingly 44% of the respondents expected their income to increase in 2016.

In the context of regular saving the index has revealed that Western expatriates are the most committed to regular saving. Leading with 48% Western expatriates are closely followed by Asians at 44% while UAE and Arab nationals scored 28% and 27% respectively. Among those that save regularly 87% said they save on a monthly basis.

On whether savings occurred in line with their 2015 plans 69% of those surveyed replied in the negative while 74% of Arab expatriates admitted to saving less than planned compared to 70% for Westerners 65% for Asians and 63% for UAE nationals.

When questioned about the factors that may negatively affect their saving plans for 2016 64% cited residential rents as the main concern 46% mentioned service bills and 45% chose education expenses.

The index also showed that 84% of the respondents in the UAE thought their savings are not enough for the future compared to 77% in 2014. Of those that thought they were not saving enough 74% were UAE nationals 78% Western expatriates 86% Arab expatriates and 86% comprised Asian expatriates.

The 2015 National Bonds Index dedicated a segment for Takaful. The findings showed that 90% of those questioned did not have Takaful coverage while 42% have conventional insurance coverage. Of those surveyed 37% have life insurance and 11% have insurance against job loss.

The index also indicated a difference in the culture of saving among nationalities. Of all respondents 77% regard personal savings as very important. Yet 47% have only started to save over the last 1-6 years. While 35% of Western expatriates started saving more than 10 years ago 11% of UAE nationals started during the same time frame compared to 18% Arab expatriates and 17% Asians.

Elaborating on the index results for the UAE Mohammed Qasim Al-Ali CEO National Bonds Corporation said "For our 2015 survey we wished to explore the factors of regular saving and the commitment of nationals and expatriates to adopt permanent saving plans to safeguard against future challenges. The survey findings indicate that the motivation to continue saving vary from the initial motivation to start saving.

"Regular savers have a clear understanding of their priorities towards their families and the fluctuating realities of life. Therefore they either commit their saving plans to cover the expenses of their children's education or provide financial security to their families. Those that do not save however may start saving as they worry about losing their jobs face difficulties paying for their children's education or simply seek high returns on their savings. It is quite evident that understanding reality is the first step toward changing our status in life. The questions we need to ask is do we have to wait for an emergency to start a saving plan?"

He added "We are glad to note that 84% of the respondents think their savings are not enough for the future compared to 77% in 2014. This indicates an increasing awareness of the importance of saving year after year and that people's dissatisfaction serves as a high motivation to continue and grow their savings."

Al Ali continued "The National Bonds Corporation Index helps people understand the social and economic situation of different segments of our community. We believe such clarity will eventually help a lot more people to improve future planning and review their financial behaviour in light of the economic and social changes. I am also glad that the gap between financial reality and the savings behaviour of a majority of UAE residents is growing smaller. Among savers 87% save on a monthly basis and 63% of credit card owners did not charge more on their cards in 2015. Additionally 64% of the same group pay their card debts every month."

Regarding the addition of a section for Takaful coverage to the 2015 savings index the CEO said "We were keen to know how many people in the UAE opted for Takaful coverage. The findings interestingly revealed that 90% of the respondents did not. This validates our strategy to design an integrated savings product that includes Takaful coverage. The product is called 'Sanadi' or My Support. Through automated deductions from savers' monthly salaries Sanadi provides rewarding benefits and profits plus an extra protection for emergencies such as death job loss and illnesses."

Al Ali concluded "We are pleased that the results showed that most respondents cited Sharia compliance as the first factor they look into when choosing a savings product. Notably the participants expressed their trust of the company's reputation and rewarding returns."

National Bonds Corporation announced up to 4% in annual returns during 2015. The announcement of the 2015 Savings Index coincides with the company's 10th anniversary and its campaign that was launched to raise awareness about the benefits of its Sharia-compliant product the first of its kind in the UAE.