The vast majority of expats in the GCC do not have any pension savings, according to a new study by Guardian Wealth Management (GWM).
Almost 65 per cent of those surveyed had no pension plan, a much higher figure than many other parts of the world. Asia (61 per cent) was comparable, while Europe (44 per cent) and North America (14 per cent) were much better prepared for retirement.
“I believe GCC expats are quite far behind other expat regions such as Asia and Europe because the high salaries and tax-free incomes make it much easier to spend earnings rather than save them,” said Hamzah Shalchi, GWM’s regional manager in the Middle East.
“As with most cases, people come to work here and before they know it, it’s been five years and they haven’t saved a penny.”
However, 24.2 percent of respondents said they had a pension based in their home country.
Shalchi suggested that one reason for the lack of pensions could be the relatively youthful average age of expats in the GCC.
“As is the case with foreign workers in places such as the UAE, many are under the age of 30 and certainly 40, meaning they may not have necessarily started thinking about saving for retirement,” he said.
GCC countries have been working with the World Bank for several years to come up with an efficient pension model that takes into consideration the fact that more than 80 per cent of the workforce are expats. Some experts say it will involve pension schemes where employers and employees and obliged to contribute.
In the Kuwait Times, columnist Muna Al Fuzai asked why so many expats aren’t being offered pensions. “The large presence of expatriates in Kuwait is often mentioned but few of us are talking about their future,” she said. “Many of them have spent years in service here, so why don’t they get a pension in case of disability, disease, dementia or old age?”
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