Affluent expats in the UAE are saving more than they would in their home countries despite high living costs, with many also increasing spending on travel, dining, family support and other areas, according to a report.
Almost all respondents surveyed by St James’s Place Middle East, 96 per cent, said they earn more in the UAE than in their home countries, while 97 per cent said they manage to save more in the UAE than they would at home. Almost half, or 48 per cent, said they earn and save at least 25 per cent more.
Career opportunities and the UAE’s tax environment were among the main factors behind the difference, Daniel George, Head of Business, Middle East at St James’s Place, said. A total of 450 UAE residents took part in the survey.
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“Career advancement is a major part of the explanation,” he told Khaleej Times, noting that 64 per cent of respondents cited career advancement as their main reason for moving abroad.
The UAE’s tax environment is also an important consideration, with 92 per cent saying taxation policies influence their choice of expat destination.
“Even so, 97 per cent say they save more each month than they would in their home country. That suggests the financial advantage remains substantial for this group, despite the pressures on household budgets,” George said.
Where the extra money is going
Among respondents whose discretionary spending has increased, 95 per cent said they are spending more on travel and leisure, while 90 per cent reported higher spending on dining and entertainment.
Family support was another major area, with 88 per cent saying they spend more on supporting family. Meanwhile, 86 per cent reported increased spending on health and wellness and 84 per cent on education and training.
At the same time, 88 per cent of those whose discretionary spending has increased are also putting more towards savings and investments.
George said the findings show that expats are using the additional income to balance their current spending with longer-term financial goals. “The cumulative effect can be significant,” he said.
Almost two-thirds of respondents, or 64 per cent, said achieving financial freedom would have taken at least five years longer had they never lived overseas. Meanwhile, 70 per cent believe living abroad will enable them to retire at least three years earlier.
The financial benefits are also leading many expats to stay abroad for longer than initially planned. More than half, or 55 per cent, said they have stayed overseas longer than expected, while 78 per cent expect to live abroad for at least eight years.
George said that as expats spend longer times abroad, their financial lives can also become more international, with assets and future plans spanning multiple countries.
“Decisions around investment, tax, retirement and succession are increasingly interconnected – and long-term, cross-border planning is increasingly important,” he said.
Source: Khaleej Times