Expats from India living and working in the United Arab Emirates are poor at planning their retirement and are unlikely to seek professional financial advice, according to a new survey.
The Standard Life NRI Wealth Study also found that Indian expats are generally risk averse.
Their study looked into their investment behaviours and financial habits and found that only 10% invested in a retirement plan, with a staggering 75% confessing that when they retire, they would rely financially on their children.
When asked, 26% said they plan to retire in India, while 24% planned to settle in a third country.
Another 22% of those who responded were expecting to work into their retirement.
Relying on children
Chris Divito, the chief executive of Standard Life International, said: “The survey shows that this group is seen to be a family-orientated community who will have to rely on their children in their retirement years.”
He added that it was ‘amazing’ from a family bonding perspective that the workers thought in this way but said it is crucial that they take financial advice from a professional when planning for retirement.
Nearly 75% of Indian expats had up to five children, with a greater number placing a bigger strain on finances which makes it more difficult to save for retirement.
However, 90% of those surveyed confessed to having made long-term investments though they tended to be in assets such as diamonds or gold and 55% said they have invested in property.
Only 19% have put money into mutual funds and 15% into equities.
The popularity of illiquid assets with Indian expats underlines the lack of advice from a professional financial adviser when it comes to planning for retirement.
Critical gaps
The study is the first of its kind carried out in the Gulf region looking into the spending, saving and investment habits of Indian expats.
When asked about India’s National Pension Scheme, 63% were positive, but confessed that they had not subscribed, with another 25% saying that the scheme would not provide a large enough income in their retirement.
With three-quarters of expats saying they are expecting to be cared for by their children when they retire will lead to critical gaps in financial and retirement planning, says Standard Life.
Indian expats should make more effort to save for their retirement because of the strain of having a larger number of children will bring to their finances in the coming years.
They should not, says Standard Life, rely on their families in retirement and the workers should take prudent steps to make investments now to help them through their later years.
