The lavish lives of the UAE’s western expats is compared against their counterparts in Singapore and Hong Kong.
UAE’s western expats: risk averse big spenders, suggests survey
The lavish lives of the UAE’s western expats was compared today against their counterparts in Singapore and Hong Kong.
The Standard Life Western Expat Wealth Study founds that 97 per cent of the those polled in the UAE were willing to spend some of their disposable income on luxurious lifestyle choices against only 47 per cent in Hong Kong and 51 per cent in Singapore.
However, in contrast to many recent surveys, the research found that 94 per cent were putting some money away for the purpose of saving and investment but just under a third (31 per cent) had sought out independent financial advice.
“Saving and spending behaviour can be varied with locations and demographics, but it is clear that most become expatriates due to financial factors,” says Chris Divito, the chief executive at Standard Life International (DIFC Branch).
“Most western expats move to high earning, tax friendly cities with the intention to save and secure their financial future. To avoid any pitfalls, it is always advisable to take professional financial advice for long term savings, investments and retirement planning.”
This lack of professional financial counselling is thought to be behind the glaring statistic that only 9 per cent of expats considered equity markets as a preferred investment vehicle against 71 per cent in Hong Kong and 43 per cent in Singapore.
“This suggests an over riding cautiousness when you tie in the respondents were generally younger, 80 per cent were under 45, and they all intend to stay here for over five years so with that extended investment horizon one would think they were able to be more speculative with their investment decisions” said Mr Divito.
“The longer your investment horizon the greater propensity you should have to invest in equities because equities will give you a better return, based on historic returns, over longer periods of time than other asset classes.”
Regardless of the willingness to splash the cash and an aversion to equity markets the UAE expat savers generally believe they are in a good place regarding retirement with 76 per cent believing they will have a sufficient retirement income against 84 per cent in Hong Kong and 47 per cent in Singapore.
“The western expat population have a misplaced confidence in their ability to support their income when they do come to retire and that again may tally with the lack of independent financial advice,” Mr Divito said.
“If you take the UAEs propensity not to take longer term investment decisions, such as equity markets, that would suggest a reckless conservatism as they are not making decisions in terms of an investment profile which will provide them with that confidence to secure themselves in the future.”