More than half of the UAE participants of a survey said they had to cut their non-essential spending in the past six months,
Saving appears to be a greater priority than paying off debts in the UAE, according to a survey report released on Tuesday.
Even though the debt ratio in the UAE is one of the highest across the 17 markets covered by the survey, paying off debts is at a lower priority among residents, perhaps because saving and securing their families is the main goal of 2021, said the report.
More than half of the UAE participants of a survey said they had to cut their non-essential spending in the past six months in order to cover expenses, and more than three-fourths (77 per cent) are likely to continue doing so in the future.
The survey by YouGov, which analyses consumers’ attitudes to financial services across 17 global markets, said a third of the participants from the UAE (34 per cent) said they had dipped into their savings to cover expenses over the past six months while 28 per cent have been able to save more but a fourth (24 per cent) of respondents have borrowed more money or taken on debt to manage the situation.
When questioned about their financial priorities in 2021, a significant proportion of consumers in each market said saving money for unexpected hardships is their top financial goal. In the UAE, two in five (41 per cent) consumers have made it their priority for 2021, according to YouGov’s whitepaper “On the money: Global banking & finance report 2021.”
“The Covid19 pandemic has affected people’s financial lives in various ways leaving many out of work and facing considerable financial stress. The data suggest this year UAE residents’ priorities are focussed on home and family. They are likely to save more rather than spend or accumulate debt. In order to make consumers feel more secure about their future, it is critical that banks and financial institutions understand the priorities of customers and extend offerings that are likely to make recovery smoother,” said Scott Booth of YouGov.
In order to manage future finances, a majority of consumers across all markets are likely to continue cutting non-essential costs in the future as well, except for Germany and Denmark (46 per cent and 45 per cent, respectively) who sit at the bottom of the list.
The survey found that 37 per cent of respondents from the UAE would like to ensure adequate protection for their families and themselves in case of emergencies, and three in ten (30 per cent) want to fulfil their regular financial commitments. Around a fourth of the respondents want to pay off their debts, invest their money, or save money for retirement. Even though saving appears to be the main goal of 2021, few residents (15 per cent) intend to buy a property or purchase assets (10 per cent) in the new year.
In addition to highlighting the changing consumer behavior during the pandemic, the paper uncovers the public perspective towards cash and payment technology. In most of the surveyed markets including the UAE (70 per cent), a vast majority of people prefer to use contactless modes of payments wherever possible.