At least 75 per cent of UAE-based NRIs expect to be cared for in old age by their children,leading to critical gaps in financial and retirement planning among them,a study has claimed.
“Only one in ten (10 percent) people have invested in retirement plans for their golden years,” said the Standard Life NRI Wealth Study,with “family expectations” playing a huge role in this decision.
“75 per cent of respondents expected to be cared for in retirement by their children,” it added.
This study by the investment company here also lists aversion to risk and lack of professional advice as factors holding back sound retirement planning among the research group.
The results of the study are based on a research of the saving,spending,investment behaviour and general aspirations of nearly 300 NRIs across the UAE.
“NRIs are seen to be a family oriented community who rely much on their children and family for their retirement years.
This is simply amazing from a family bonding perspective,but it is always advisable to take professional financial advice when it comes to retirement planning,” said Chris Divito,CEO,Standard Life International Limited (DIFC Branch).
“With 75 per cent of respondents having three to five financial dependants,there is greater strain of finances and therefore a prudent approach to financial and retirement planning is highly recommended,” he added.
While as many as 90 per cent of the respondents have made long term investments in the past,most of their preferences were towards relatively illiquid assets like gold/diamonds (77 per cent) and property (55 per cent).
The interest in asset classes like mutual funds (19 per cent) and equities (15 per cent) was rather low,the study found.
Despite a positive feeling among 63 per cent respondents about the National Pension Scheme (NPS) of the Indian government,most of them have not subscribed to it.
“25 per cent are of the opinion that NPS will not provide sufficient income for their retirement years,” it added.
Also,a quarter of these NRIs plan to return to India after retirement.
“26 per cent of respondents said they hope to return to India after retirement,while 24 per cent would retire in a third country,” Standard Life said in a statement.