Over 50% Of UAE Residents Have Stopped Or Reduced Saving Due To The Pandemic

New research* from Quilter, the wealth manager, reveals that the Covid-19 pandemic has caused more than half of people in the UAE to reduce how much money they save or stop saving completely.

When respondents were asked whether they had been able to save more during the coronavirus pandemic, just 13% said they were saving more.

Most people surveyed (27%) said that they had lost their income and therefore could no longer save and a further 25% said that the pandemic had caused them to save less than before.

Close to 43% of respondents aged 61 to 70 said they had lost their income during the pandemic. This was true for 31% of people aged 40-50 and 31% of those aged 51 to 60.

The research also shows that women were much more likely to have lost their income and means of saving during the pandemic with 32% saying they had compared to 25% of male respondents.

Similarly, 34% of those on the lowest incomes of up to AED 5,000 a month said they had lost their income during the period compared to just 14% of those on the highest salaries of AED 40,000 a month or more.

Just 15% of respondents said that the pandemic had not changed how much they saved and a further 11% said that in the early days of the pandemic they had managed to save more.

Brendan Dolan, global distribution director of Quilter International says:

“This research highlights how badly the pandemic has impacted people’s savings habits. Millions of people have experienced a fall in income and the economy suffered a huge economic shock when the UAE went into lockdown.

“It is therefore no surprise that more than half of people had to readjust their saving habits to cope in these unusual and difficult circumstances.

“It is times like these where financial advice comes into its own and shows its value by making sure that these short-term shocks don’t derail your long-term financial plans. Sorting through finances is complicated and as hard as we try to be rational there is a level of emotion involved which can hinder your decisions especially during stressful circumstances such as this pandemic.”

Mark Leale, head of Quilter Cheviot’s Dubai branch office, adds:

“We often think about the immediate effect that events may have on our lives, but it is the long-term consequences that can impact us most. Just as in this example where we explore the impact that COVID has had on the population’s ability or willingness to save. This addresses a short-term situation but a prolonged reduction in savings will lead to a lower accrued pot of capital for its intended future use, whether providing for retirement or otherwise.

“Similarly, when looking at the management of investment portfolios and decision making throughout the relationship, we encourage clients to remain focussed on their long-term target. Flexibility is important however, allowing changes to be made where there are fundamental changes to a client’s circumstances, whether the ability to save, need to adjust their risk profile or start driving an income from their investments.”

*Research completed by YouGov, on behalf of Quilter, surveying 1,000 people in the UAE in November 2020