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Expats in the UAE save less than their Singapore, HK counterparts

Western expatriates based in the United Arab Emirates are less prudent than their counterparts in Singapore and Hong Kong when it comes to financial planning, according to a new study released today by Standard Life.

The findings were seen as something of a surprise, as the UAE is a low-tax jurisdiction, and because many of those who take assignments in the Gulf do so for the financial benefits, a summary of the findings of the first Standard Life Western Expat Wealth Study note. The report studied the saving, spending and investment behaviour of approximately 400 western expats across the UAE, Singapore and Hong Kong.

The report revealed that some 97% of those interviewed in the UAE said they spent “some” of their disposable income on luxurious lifestyle choices, while only 31% reported seeking professional financial advice, and only 9% said they allocated funds for equity investments. Those expats in Singapore and Hong Kong, by comparison, seemed far less profligate, with just 51% and 47% respectivelyA�saying they splashed out on “luxury lifestyle” options. A greater percentage also reported that they sought professional financial advice in these jurisdictions — 49% in Singapore, and 53% in Hong Kong.

Hong Kong expats were also the most likely to invest in equity investments, with 71% saying that they had done so. Their counterparts in Singapore were less keen on equities, with 43% saying they allocated money for them. Other findings:

  • A relatively high percentage of UAE respondents (70%) said they invested in mutual funds, as compared to 67% in Singapore and 56% in Hong Kong
  • Some 66% of expatriates in Singapore said they favoured gold as an investment, compared with 56% in Hong Kong, and justA� 15% in the UAE
  • Property was the most popular asset class among the Singapore-based expats interviewed (78%), while those in Hong Kong also liked it, if not quite as much (55%). In the UAE the percentage was less than half (48%)

Noting that most expatriates typically go abroad to these destinations for financial reasons, Chris Divito, chief executive of Standard Life International’s Dubai operation, said the survey highlighted the importance of obtaining financial advice while away from home, in order to take full advantage of one’s foreign posting.

He said Standard Life had decided to invest in the research into Western expatriate investment habits in the three jurisdictions in order to “understand our western expat customers better, so that we can offer them the right financial solutions across different locations and jurisdictions”.