Daily Personal Finance Insights –Spending not saving
Credit card spending - no changes, but more on luxury items
Indications from a Credit Suisse Bank and AC Nielsen study indicate that credit card spending by residents in the region is unchanged; showing that credit-card spending in 2012 was consistent with that of 2010. The study indicates there has been a shift away from spending on ‘simply the essentials of life’ towards discretionary and luxury spending - especially on smart-phones, notebook computers, tablet PCs, luxury food and hygiene/toiletry items.
More than half in UAE not saving enough for retirement says study
A comprehensive report by HSBC bank, ‘Retirement a new reality’, which interviewed more than 15,000 people worldwide, some 1,000 of whom reside in the UAE, indicates a large percentage of respondents are not financially prepared for retirement. More than 86% of UAE respondents say they would need over three-quarters of their current income to remain comfortable in retirement. 36.5% of UAE respondents say they are not adequately prepared financially for retirement and, worryingly, of the UAE respondents 17% said they are not prepared at all. As life expectancy extends, 60% of UAE residents replied that they expect their retirement savings to run out just over half way through retirement. Of those surveyed, 40% said they will need to cut down on spending to save more for retirement.
Stimulating the economy
Abu Dhabi Department of Economic Development (ADDED) launched its strategy to Support and Stimulate the Private Sector in the Emirate. The strategy aims at strengthening the role of the private sector, to enable it to contribute to the achievement of the objectives of the Economic Vision 2030 and raise the contribution of non-oil sectors to 64% of the Emirate's GDP by 2030. The overall theme is “A large empowered private sector.”
The strategy contained 29 initiatives to be implemented - most importantly the initiative to reduce the number of procedures and number of days required to start a business, together with reducing the cost of starting a business from 10% of gross national income per capita to 6%. This is intended to be accomplished during the current year. The strategy also aims to set-up of a federal level credit rating company for small and medium-sized enterprises. Finally the goal is to create a knowledge economy.
Name change and focus
The Emirates Banks Association, the organization that recently submitted a request to the Central Bank on changes to mortgage caps, has announced the change of its name to become "UAE Banks Federation." The UAE Banks Federation charter aims at ‘playing a major role in developing banks employees' skills while striving, at the same time, to offer customers high quality services and protect their interests, and thus providing a proper environment to enable the banking sector fulfill its role in economic development.’