There will no longer be that looming feeling about the future as would-be retirees pass the age of 50
An older, wiser generation will be making the UAE their adopted home
In June, when announcements were made about an impending raft of changes designed to stimulate the economy, I commented that while it would take time for them to have an effect, the news alone would inject a sense of optimism into a landscape in need of reform.
Yesterday, those promises began to bear fruit.
Others better qualified than I can comment on the economic steps for Abu Dhabi revealed by Crown Prince Sheikh Mohammed bin Zayed, Deputy Supreme Commander of the Armed Forces. I will instead address the Cabinet decision that retired expatriates over the age of 55 will be able to secure a five-year – possibly renewable – residence visa, provided that they meet certain conditions.
This move has clearly beneficial implications. Of course, the new retirement visa isn’t going to be available for everyone. The conditions that retirees must own properties worth at least Dh2 million, have at least Dh1 million in savings or be in receipt of an active income of Dh20,000 a month will for many be onerous or impossible to meet.
Some clarification would be helpful too. Can we assume that married couples who collectively meet these conditions will both be eligible? After the five-year period, will beneficiaries have to prove their financial worth again? And while a property might be worth Dh2 million now, it could be valued differently five years hence. That is great if property prices have risen but what if they haven’t or have fallen?
One also wonders how retirees will be assessed. Will they need to have spent a certain number of years here before qualifying? I heard today, for example, of a businessman living overseas who immediately asked whether, if he immediately bought a property for Dh2 million, he would be entitled to retire in the UAE. If people have spent years here but then left, is there scope for them to invest and then return? All these issues will, no doubt, be clarified in due course.
A number of benefits of the new rule, however, can be immediately identified. One is that it will provide a way for people with the appropriate level of financial resources, who are already living and working here, to retire, should they choose to do so.
There will no longer be that looming feeling as they pass the age of 50 over whether they should plan to leave. Many who have spent years here will certainly consider taking up the option of remaining. While a surge in cash purchases of properties priced at more than Dh2 million might not happen, banks, finance companies and property firms should benefit from a flow of mortgage requests from those now able to look a few years ahead.
The residential property market is currently suffering from problems of oversupply and a downturn in demand. The availability of retirement visas should, in time, provide a useful boost.
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There are other potential economic benefits too. People who can now plan to stay will be more inclined to spend money locally. Rather than hanging on to an old car for a bit longer, perhaps they’ll buy a new one. And rather than sending money home, perhaps some will be spent on a nice but unnecessary luxury item, or on going out for a lavish meal more often.
Shopping malls suffering from a decline in footfall might benefit from such an increase in expenditure. Healthcare providers might profit, too, from the presence of more retired people, as well as companies providing health insurance.
Life isn’t just about economics, though. Perhaps one of the most significant potential benefits from the new visa will be its contribution to social stability. Many approaching retirement age will have brought up children who are now working here. In the past – except in cases where children have been able to sponsor their retired parents – families have been split up.
In turn, children who reach adulthood then have to consider that they, too, will have to leave one day. That has an impact not only on their own decisions with regards to spending, saving and investment but also on family life. It’s widely recognised that children benefit from having grandparents involved in their upbringing. Today, many families here don’t have that option but in the future, they will.
Beyond all that, there’s another benefit for the country as a whole. Each year, as people retire and leave, the UAE loses their knowledge and experience. If even some decide to stay, the nation retains these valuable resources.
Indeed, thanks to another new rule – that people can now start businesses from home – perhaps some retirees will invest time in pursuing a few ideas that would otherwise have been lost to the country and to its economy. That could prove to be of enormous long-term benefit.
There is much to be welcomed about the new decision. It is part of a policy and philosophy of forward-thinking that will serve the country well.
Peter Hellyer is a consultant specialising in the UAE's history and culture